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AMSTERDAM - Nebius Group N.V. (NASDAQ:NBIS), a prominent AI infrastructure firm with a market capitalization of $8.75 billion, has announced the successful arrangement of a $1 billion private placement of senior unsecured convertible notes. The notes are split into two tranches, with $500 million at 2.00% due in 2029 and another $500 million at 3.00% due in 2031. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt, and its current ratio of 18.0 indicates robust liquidity.
Arkady Volozh, the CEO of Nebius, expressed confidence in the investment community’s belief in the company’s growth trajectory. With previous equity financing in December 2024, Nebius has been rapidly expanding its global AI infrastructure. The additional capital is aimed at propelling the company towards its revenue target in the mid-single-digit billions by accelerating their infrastructure development. InvestingPro analysts forecast sales growth of 3.85% for FY2025, though profitability remains a challenge with a negative EBITDA of $398 million in the last twelve months.
The company plans to utilize the proceeds to enhance its business operations, which include acquiring more computing power, expanding data center facilities, and for general corporate purposes.
The notes, which are set to be issued on or about June 5, 2025, will mature on June 5 of their respective years, 2029 and 2031, unless they are redeemed, repurchased, or converted earlier. The notes will accrue interest semi-annually and are slated to pay out an accreted principal amount at maturity, which will amount to 120% and 125% of the original principal for the 2029 and 2031 notes, respectively.
Investors will have the option to convert their notes into Class A ordinary shares at an initial conversion rate that implies a 40% premium over the recent sale price of Nebius’s shares. The conversion premium will effectively increase to approximately 68% for the 2029 notes and 75% for the 2031 notes at maturity.
The notes offer conversion and redemption options under certain conditions, including a fundamental change or if the company’s share price exceeds a specified threshold. The company may also redeem the notes for cash after certain dates, provided the share price meets the required criteria.
Nebius has agreed to a 30-day lock-up period with customary exceptions and has granted initial investors certain registration rights for the shares issuable upon conversion of the notes.
The offering targets qualified institutional buyers, with Goldman Sachs Bank Europe SE acting as the sole placement agent. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.
Information in this article is based on a press release statement from Nebius Group. The stock has shown remarkable momentum, delivering a 94% return over the past year and a 43% gain in the last six months. Investors seeking deeper insights can access comprehensive analysis and 8 additional ProTips through InvestingPro, including detailed financial health scores and exclusive Fair Value calculations.
In other recent news, Nebius Group reported a remarkable 385% year-over-year increase in revenue for the first quarter of 2025, reaching $55.3 million. Despite this substantial growth, the revenue was slightly below the analyst consensus estimate of $57.7 million. The company’s adjusted EBITDA loss improved by 12% from the previous year, although the net loss from continuing operations widened to $113.6 million. DA Davidson responded by raising Nebius Group’s price target to $50, maintaining a Buy rating due to the company’s strong earnings and growth in its core business. The firm also confirmed its full-year core Annual Recurring Revenue guidance to be between $750 million and $1 billion. Additionally, Nebius Group announced a strategic investment in its AI data solutions business, Toloka, supported by Bezos Expeditions and Shopify’s CTO, Mikhail Parakhin. The company appointed Marc Boroditsky as the new Chief Revenue Officer, bringing his extensive experience from previous roles to drive revenue growth. These developments highlight Nebius Group’s strategic focus on scaling operations and enhancing its market position in the AI infrastructure sector.
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