Axon to exchange $407.5 million in notes for cash and stock

SCOTTSDALE, Ariz. - Axon Enterprise, Inc. (NASDAQ: AXON), a leader in public safety technology with a market capitalization of $38.26 billion and strong financial health according to InvestingPro, has entered into exchange agreements with certain note holders to swap roughly $407.5 million of its 0.50% convertible senior notes due in 2027. The company maintains robust liquidity with a current ratio of 2.3 and holds more cash than debt on its balance sheet. The exchange, subject to standard closing conditions, will involve cash and shares of Axon’s common stock, the amount of which will be determined over an averaging period starting today.

If the volume-weighted average price of Axon’s common stock is equal to the March 6 closing price of $499.31 throughout the averaging period, Axon anticipates issuing around 1.0 million shares once the exchange is complete. The cash portion will cover the principal and any accrued unpaid interest on the exchanged notes. This transaction is expected to close around March 13, 2025, leaving Axon with approximately $282.5 million in notes still outstanding.

The exchange agreements may prompt hedged note holders to adjust their positions by purchasing Axon stock or modifying their derivative transactions related to the company’s stock. These actions could significantly impact the market price of Axon’s common stock, potentially increasing it or lessening any decrease. The extent and effect of this market activity are unpredictable.

Shares issued during the exchanges will not be registered under the Securities Act of 1933 and will be subject to U.S. securities laws restrictions. The press release from which this information is drawn does not serve as an offer to buy or sell Axon securities in any jurisdiction where such transactions would be illegal.

This news is based on a press release statement and provides a factual report of Axon’s financial activities without any endorsement of claims or predictions of market impacts. With impressive gross profit margins of 59.64% and strong financial metrics, investors seeking deeper insights into Axon’s valuation and growth potential can access comprehensive analysis through InvestingPro’s detailed research reports, which are available for over 1,400 US stocks.

In other recent news, Axon has announced an increase in its senior notes offering to $1.75 billion, surpassing the initial target of $1.5 billion. This offering includes $1 billion of 6.125% senior notes due 2030 and $750 million of 6.250% senior notes due 2033. The proceeds are intended for general corporate purposes, such as repurchasing or redeeming existing notes and investing in new product lines and technologies. In analyst updates, TD Cowen raised its price target for Axon to $725, highlighting the company’s strong fourth-quarter performance and optimistic revenue guidance for fiscal year 2025. Conversely, Craig-Hallum adjusted its price target to $600, maintaining a Hold rating while acknowledging Axon’s record $2.5 billion in bookings for the fourth quarter. Needham also maintained a Buy rating with a $600 price target, citing Axon’s consistent growth and a total contracted backlog of $10.1 billion. The analysts collectively noted Axon’s effective management of investor concerns and strategic market positioning. These developments reflect Axon’s ongoing efforts to strengthen its financial standing and market presence.

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