ATLANTA – Cardlytics, Inc. (NASDAQ: NASDAQ:), a digital advertising platform, announced its intention to offer $150 million in convertible senior notes due 2029 to qualified institutional buyers, subject to market conditions. The private offering complies with Rule 144A under the Securities Act of 1933, as amended.
Additionally, Cardlytics plans to offer initial purchasers the ability to purchase up to an additional $22.5 million in notes within 13 days of issuance. These senior unsecured notes will mature on April 1, 2029, unless earlier converted or repurchased by the Company. The bonds will accrue interest payable semi-annually and bondholders will have the right to convert their bonds under certain conditions.
The interest rate and initial conversion rate will be established during negotiations with initial purchasers at the time of pricing. Cardlytics plans to use a portion of the net proceeds to repurchase a portion of its 1.00% Convertible Senior Notes due 2025 in privately negotiated transactions. The remaining funds are expected to be used for general corporate purposes.
In the event of specific corporate changes, bondholders may request that Cardlytics repurchase their bonds for cash at the principal amount plus any accrued interest. The terms of these repurchases will vary based on various factors, and there is no guarantee as to the amount of 2025 Notes that will be repurchased or the terms of any repurchase thereof.
The announcement also mentioned potential market activity by bondholders that could affect the market price of Cardlytics’ common stock. This includes the liquidation of hedge positions and derivative transactions related to the company’s shares, which could affect the actual conversion price of the bonds.
Cardlytics may also terminate a portion of its current restricted call transactions in the event that any of the 2025 Notes are repurchased. This could result in option counterparties or their affiliates engaging in market transactions that could impact the market price of the company’s common stock and the market value of the notes.
The notes and any shares of common stock issuable upon conversion thereof will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold without registration or an exemption from registration requirements.
This press release is based on a press release and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The bond offering is not contingent on the 2025 bond repurchase.
Insights on InvestingPro
As Cardlytics, Inc. (NASDAQ: CDLX) makes its strategic financial moves with its convertible senior notes offering, real-time data and insights from InvestingPro paint a broader picture of the company’s current market position. With a market capitalization of $972.34 million, Cardlytics operates at a significant scale in the digital advertising industry.
Despite the company’s negative P/E ratio of -13.36 over the trailing twelve months as of Q1 2023, indicating that it has been unprofitable during this period, the company’s gross profit margin stands robustly at 42.17%, suggesting effective cost management in its core operations.
Investors may find the company’s stock volatility and recent performance particularly noteworthy. Cardlytics has seen a significant return over the past week, with a total price return of 43.62%.
Furthermore, the stock traded near its 52-week high, at 98.68% of the peak price, reflecting investor optimism and potential confidence in the company’s future growth prospects. This is further supported by a remarkable one-year total price return of 658.43%, indicating strong investor sentiment over the past year.
For those looking to delve deeper into Cardlytics’ prospects, Professional investment tips reveal that the stock generally trades with high price volatility, which could be an important consideration for investors with different risk appetites. Additionally, the company’s cash exceeds short-term obligations, which can provide some reassurance regarding the company’s liquidity and ability to meet immediate financial obligations.
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