Twitter Inc (NYSE:TWTR) is seeking to raise up to $1.5 billion from the company’s first ever debt offering. Twitter Inc (NYSE:TWTR) has announced two $650 million convertible bond offerings in a filing with the United States Securities and Exchange Commission yesterday.
The social media company has the option to sell an additional $100 million for each of the two chunks of convertible bonds if the offerings are oversubscribed. The company’s notes are only being offered to institutional investors.
All in all, if there is more demand for the convertible bonds than initially offered, Twitter Inc (NYSE:TWTR) stands to raise $1.5 billion. Convertible bonds are notes that pay interest just like regular bonds but have the potential to be converted to company shares. The two chunks of convertible senior notes will vest in 2019 and 2021 respectively.
Twitter Inc (NYSE:TWTR) did not reveal what it would specifically do with the additional capital but did say in a statement that apart from using a portion of the proceeds to pay the cost of transactions, it will use the money for “general corporate purposes”.
Twitter Inc (NYSE:TWTR) investors includes John Thaler’s Jat Capital Management which reported about 7.33 million shares in the company by the end of the second quarter of the year. This stake was valued at about $300.3 million at the time the company reported the stake. It makes up 5.56% of the hedge fund’s whole portfolio.
Another investor in the technology company is Steve Cohen’s Point72 Asset Management which said by the end of the second quarter that it owned about 1.72 million shares in the company. The stake, which was valued at about $70.36 million at the time the firm reported the stake, accounts for 0.45% of the hedge fund’s whole portfolio.