Why Software Company Five9 Shares Are Sliding Premarket Today

Zinger Key Points
  • Five9 announces a $600 million convertible notes offering due 2029, with an option for additional $90 million.
  • Proceeds will cover capped call transactions, repurchase of existing notes, and support working capital needs and corporate purposes.

Five9, Inc. FIVN shares are trading lower Tuesday morning. Yesterday, the company announced a proposed $600 million convertible notes offering.

The aggregate principal amount of convertible senior notes is due 2029 in a private placement to qualified institutional buyers.

Five9 also expects to grant the initial purchasers of the notes a 13-day option to buy up to an additional $90 million principal amount. The interest for senior, unsecured obligations notes will be payable semi-annually in arrears. 

Five9 anticipates using a portion of the net proceeds from the offering to pay the cost of the capped call transactions and to repurchase a portion of its outstanding 0.500% convertible senior notes due 2025. 

The company plans to use the remainder of the net proceeds for working capital and other general corporate purposes. 

Last week, the company reported fourth-quarter revenue of $239.1 million, beating the consensus of $238.00 million, and adjusted EPS of $0.61 exceeded the estimate of $0.49.

As of December 31, 2023, Five9 held cash and equivalents plus marketable investments of $730 million. The company expects FY24 revenue of $1.053 billion-$1.057 billion vs. $1.055 billion estimate.

Price Action: FIVN shares are down 5.35% at $59.99 premarket on the last check Tuesday.

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