Tempus AI stock falls after proposed $400M convertible notes offering

Published 30/06/2025, 13:28
© Reuters.

Investing.com -- Tempus AI (NASDAQ:TEM) stock fell 2.6% after the precision medicine technology company announced a proposed $400 million convertible senior notes offering due in 2030.

The Chicago-based company plans to use a portion of the proceeds to repay outstanding term loans, including immediately paying off its $275 million 2027 term loan. This move is expected to reduce interest expenses and enhance financial flexibility. Additional proceeds will fund capped call transactions to reduce potential dilution and for general corporate purposes.

The notes will be offered to qualified institutional buyers as general unsecured obligations of Tempus, with interest payable semiannually and maturity set for July 15, 2030. Upon conversion, Tempus may pay in cash, shares of its Class A common stock, or a combination of both, at its discretion.

Tempus also intends to grant initial purchasers an over-allotment option to buy up to an additional $60 million in notes within 13 days of the initial issuance.

In connection with the offering, the company plans to enter into privately negotiated capped call transactions with financial institutions. These transactions are designed to reduce potential dilution to Class A common stock upon conversion of the notes and/or offset cash payments exceeding the principal amount of converted notes.

The AI-powered precision medicine company expects the option counterparties to establish hedges through various derivative transactions and stock purchases around the time of pricing, which could affect the market price of both Tempus stock and the notes.

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.