Drops 6% on $875M Convertible Note Offering

High-performance computing firm IREN (IREN) stock slipped 6% on Tuesday post-market after announcing a $875 million convertible debt offering.

The offering may increase to $1 billion if initial purchasers take up an option to buy an additional $125 million, the press release said. The notes will be unsecured and give holders the right to convert into IREN shares or cash under certain conditions, with maturity set for July 2031.

The firm said proceeds will fund general operations and capped call transactions, which are intended to reduce potential share dilution if the notes convert into equity. These capped calls are also designed to offset potential cash payments if the company’s share price climbs significantly. The company added it may seek shareholder approval to repurchase shares to settle those instruments in the future.

The decline nearly erased today’s advance on signing new multi-year artificial intelligence (AI) cloud contracts tied to Nvidia Blackwell GPU deployments. Even with the drop, the stock is still up around 1,000% from the April lows as investor appetite for AI-related infrastructure turned feverish.

Read more: Bitcoin Miner IREN Jumps 9% After Securing New Multi-Year AI Cloud Contracts