Mar. 5 at 8:42 AM
$DAVE
Dave announced the pricing and upsizing of their notes deal overnight:
https://investors.dave.com/news-releases/news-release-details/dave-announces-pricing-175-million-0-convertible-notes
It's complicated but to me it represents perhaps the most shareholder aligned piece of financial engineering I've seen from a company this size.
That wall st not only bought it but upsized it is a pretty big tell.
They basically lent Dave 175m at a 0% interest rate for the right to convert that debt into shares 5 years from now.
They set a conversion price at
$279.13 which is roughly where i thought it would land
Dave bought capped calls that effectively insure them against dilution until the stock hits
$421.34
Dave is buying 334,000 shares from note holders at
$210.67 right now in private transactions - this is over and above the 300m buyback already announced.
They are effectively running a vertical spread on their own stock (buy calls at 279, sell calls at 421)
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