High-performance computing company IREN (IREN) experienced a 6% stock decline in Tuesday's post-market trading following the announcement of an $875 million convertible debt offering.
The offering could potentially reach $1 billion if initial purchasers exercise their option to acquire an additional $125 million in notes, according to the company's press release. These unsecured notes will grant holders conversion rights into IREN shares or cash under specific conditions, with maturity scheduled for July 2031.
IREN stated that proceeds will support general corporate operations and capped call transactions designed to minimize potential share dilution if the notes convert to equity. The capped call strategy also aims to counterbalance potential cash payments should the company's share price experience substantial growth. The firm noted it might pursue shareholder authorization for future share repurchases to settle these instruments.
This decline nearly eliminated today's gains achieved through new multi-year artificial intelligence (AI) cloud contracts associated with Nvidia Blackwell GPU deployments. Despite the current drop, IREN stock maintains approximately 1,000% growth from April lows as investor enthusiasm for AI infrastructure investments continues to intensify.