McEwen Shares Are Falling Today: What's Going On?

Zinger Key Points

Shares fell 13.2% after the company announced a $95 million convertible senior notes offering.
The offering will help refinance debt, but investor concerns over dilution contributed to the stock's decline.
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McEwen Mining Inc. MUX shares are moving lower Wednesday after the company announced a $95 million private placement of convertible senior notes, triggering a sharp sell-off.

What To Know: The offering, which includes an option for initial purchasers to buy an additional $15 million in notes, will provide McEwen with capital to refinance $20 million in higher-interest debt and fund general corporate purposes. The notes, due in 2030, will carry a 5.25% interest rate and an initial conversion price of $11.25 per share, representing a 30% premium over Tuesday's closing price of $8.65.

The company also entered into capped call transactions designed to mitigate dilution from conversions at maturity, potentially raising the effective conversion price to $17.30 per share. However, the market reaction suggests investor concerns about dilution and debt issuance, leading to the sharp decline in McEwen's stock price.

The transaction is expected to close on Feb. 11, 2025, pending customary closing conditions.

MUX Price Action: McEwen shares were down 13.2% at $7.51 at the time of writing, according to Benzinga pro.