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Investing.com -- Shares of Zscaler (NASDAQ:ZS) fell more than 3% in premarket trading Monday after the cloud security firm announced plans to raise capital through a private offering of convertible bonds.
The company is seeking to issue $1.5 billion in three-year convertible bonds.
Zscaler plans to use a portion of the net proceeds to pay for capped calls, which are derivative transactions designed to reduce potential dilution from the bond conversion.
The remaining funds will be allocated for general corporate purposes, including working capital, capital expenditures, potential acquisitions, and strategic transactions.
The convertible bond offering represents a significant capital raise for the cloud security company as it looks to strengthen its financial position and potentially fund growth initiatives.
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