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Investing.com -- Planet Labs PBC (NYSE:PL) stock fell 7% in after-hours trading on Monday, after closing higher by 48%, following the company’s announcement of a proposed $300 million private offering of convertible senior notes.
The San Francisco-based satellite imaging company said it plans to offer $300 million in convertible senior notes due 2030 to qualified institutional buyers. Planet Labs also expects to grant the initial purchasers an option to buy up to an additional $45 million in notes to cover over-allotments.
According to the company’s statement, the notes will be unsecured obligations maturing on October 15, 2030, unless converted, redeemed, or repurchased earlier. They will be convertible into cash, shares of Planet’s Class A common stock, or a combination at the company’s discretion.
Planet Labs intends to use part of the proceeds to fund capped call transactions, which are designed to reduce potential dilution to existing shareholders upon conversion of the notes. The remainder will go toward general corporate purposes.
The stock had initially surged following strong second quarter results earlier in the day before retreating after the convertible notes announcement. The offering is subject to market conditions and other factors, with interest rates and conversion terms to be determined at pricing.
In connection with the offering, Planet Labs expects to enter into capped call transactions with initial purchasers or their affiliates, with the cap price initially representing a premium of at least 100% over the last reported sale price of the company’s Class A common stock on the pricing date.
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