Robinhood Markets said it plans to raise $2.0 billion through a private offering of convertible senior notes due 2029, with an option for purchasers to buy an additional $200 million of notes within 13 days of issuance.
The company said it expects to use about $300 million of the proceeds to repurchase Class A shares. It also plans to use part of the proceeds to pay for capped call transactions, with any remaining proceeds going to general corporate purposes, including organic growth investments, potential acquisitions and capital expenditures.
The notes will mature on Oct. 1, 2029. Robinhood said it cannot redeem the notes before July 1, 2028, except in a cleanup redemption. From July 1, 2028 through the 21st scheduled trading day before maturity, the company may redeem the notes for cash if its Class A stock trades at least 120% of the conversion price for at least 20 trading days during a 30-day period.
Robinhood said the capped call transactions are intended to offset dilution and/or cash payments above principal on the notes, up to a cap. The company said the repurchases tied to the offering and its ongoing stock buyback program could affect the market price of its Class A shares and the notes. Today the company's shares have moved -0.56% to a price of $105.115. For more information, read the company's full 8-K submission here.
