Jun. 16 at 2:55 PM
$BAND is down roughly 25% in two days because of the convertible note offering, but the notes convert at
$72.64 per share while the stock is trading around
$50. In other words, investors are worrying about dilution that only becomes meaningful if the stock rises dramatically from here. The company is also refinancing existing debt, paying down borrowings, and using capped calls to help reduce future dilution. To me, the size of the selloff seems much bigger than the actual impact of the financing and looks more like a market overreaction than a change in the long-term business story.
