Bloom Energy plans $1.75 billion convertible notes offering

SAN JOSE, Calif. - Bloom Energy Corporation (NYSE:BE) announced Thursday its intention to offer $1.75 billion in zero-interest convertible senior notes due 2030 in a private offering to qualified institutional buyers. The company also plans to grant initial purchasers an option for an additional $250 million in notes. The announcement comes as Bloom’s stock has surged over 1,200% in the past year, with shares currently trading at high valuation multiples according to InvestingPro data, suggesting the stock may be overvalued compared to its Fair Value.

The notes will be senior, unsecured obligations maturing on November 15, 2030, with no regular interest and no principal accretion. Noteholders will have conversion rights under certain circumstances, with Bloom Energy settling conversions through cash, shares of Class A common stock, or a combination of both.

Bloom Energy intends to use part of the proceeds to pay for concurrent exchange transactions with holders of its existing 3.00% Green Convertible Senior Notes due 2028 and 2029. The remainder will fund general corporate purposes, including research and development, sales and marketing, manufacturing expansion, and capital expenditures. The company currently operates with a moderate debt level, with a debt-to-equity ratio of 2.56, while maintaining strong liquidity with a current ratio of 4.99.

The notes will be redeemable at Bloom Energy’s option after November 20, 2028, if the company’s stock price exceeds 130% of the conversion price for a specified period. Initial conversion rates and other terms will be determined during the pricing of the offering.

The company noted in its press release that holders participating in the exchange transactions may purchase or sell shares of Bloom Energy’s Class A common stock to adjust hedge positions, potentially affecting the market price of the stock or the new notes.

The notes and related shares have not been registered under the Securities Act and cannot be offered or sold except under exemptions from registration requirements.

In other recent news, Bloom Energy reported impressive third-quarter earnings, with revenue reaching $519 million, marking a 57% increase compared to the previous year. This strong performance was primarily driven by AI-related data center deployments and early projects from a joint venture with Brookfield. BMO Capital responded by raising its price target for Bloom Energy to $136, noting that the company’s revenue significantly exceeded both its own estimate of $444 million and the consensus estimate of $423 million. Similarly, TD Cowen increased its price target to $105, citing the company’s better-than-expected earnings, with related party revenue accounting for 55% of the total.

HSBC upgraded Bloom Energy’s stock rating from Hold to Buy, reflecting optimism about the company’s involvement in AI data centers and hydrogen energy solutions. Despite these positive developments, Bank of America Securities maintained an Underperform rating with a $26 price target, even after acknowledging the solid quarterly results. Meanwhile, Oppenheimer held its Perform rating, emphasizing Bloom Energy’s advantages in the data center sector, particularly its power conversion capabilities. These developments highlight a range of perspectives from analysts on Bloom Energy’s recent performance and future potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.