Wix plans to offer $750 million in convertible senior notes

NEW YORK - Website builder platform Wix.com Ltd. (NASDAQ:WIX), currently valued at $8.56 billion and showing strong momentum with an 8.5% gain last week, announced Monday its intention to offer $750 million in convertible senior notes due 2030 to qualified institutional buyers in a private offering. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value calculations.

The zero-interest notes will mature on September 15, 2030, unless earlier repurchased, redeemed or converted. Wix expects to grant initial purchasers a 13-day option to buy up to an additional $112.5 million in notes.

According to the company’s statement, the notes will be convertible into cash, Wix ordinary shares, or a combination at Wix’s discretion. Conversion will be available under certain conditions before March 15, 2030, and at any time thereafter until two trading days before maturity.

In connection with the offering, Wix plans to enter into capped call transactions with the initial purchasers or their affiliates, which are expected to reduce potential dilution to ordinary shares upon conversion.

The company intends to use proceeds to fund the capped call transactions, repurchase approximately $50-75 million of its ordinary shares under its existing share repurchase program, and for general corporate purposes.

The concurrent share repurchase will be executed through privately negotiated transactions at a price equal to Wix’s closing share price on the pricing date.

The notes and potential underlying shares have not been registered under the Securities Act and will only be offered to qualified institutional buyers pursuant to Rule 144A.

Based on the press release statement, the offering is subject to market conditions and other factors, with final terms including the initial conversion price to be determined at pricing. For investors seeking deeper insights into Wix’s valuation metrics and growth prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, available as part of its coverage of over 1,400 US stocks.

In other recent news, Wix.com has made several notable announcements and updates. The company reported a significant expansion of its share repurchase program, with an additional $200 million authorized, potentially increasing the total repurchase authorization to $500 million. This move follows the repurchase of $300 million in ordinary shares since early 2025. On the earnings front, CFRA upgraded Wix.com’s stock rating from Hold to Buy, citing strong revenue growth projections. The firm anticipates a slower yet robust two-year revenue compound annual growth rate of 13% through 2026, with revenue expected to rise to $2.3 billion by 2026.

Meanwhile, Citizens JMP has maintained its Market Outperform rating on Wix.com but adjusted its price target to $160, down from $250, due to investments in Base44 affecting operating income expectations. UBS also revised its price target for the company, lowering it to $200 from $230, despite Wix.com raising its full-year booking guidance by $15 million. UBS attributes this adjustment to concerns over margins, even as the company shows strong cohort performance and improved metrics. These developments reflect a dynamic period for Wix.com, with analysts expressing varied outlooks based on recent performance and strategic decisions.

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