Fermi Inc. (NASDAQ:FRMI) shares fell in after-hours trading on Thursday after the company priced an upsized $375 million convertible senior notes offering with capped call transactions designed to reduce shareholder dilution.
Fermi closed Thursday’s regular session at $7.32, down 0.54%. In after-hours trading, the stock fell another 15.57% to $6.18.
Fermi develops advanced energy infrastructure and operates under the Fermi America brand.
$375 Million Notes Offering
Fermi priced $375 million of 5.00% convertible senior notes due 2031, up from its previously announced $350 million target. The company also granted initial purchasers an option to buy an additional $56.25 million of notes, with the offering expected to close on July 14, subject to customary conditions.
The notes carry an initial conversion price of approximately $9.52 per share, representing a 30% premium to Fermi’s July 9 closing price. Through privately negotiated capped call transactions, the company said the effective conversion price increases to about $14.64 per share, which is intended to offset potential shareholder dilution until that level.
Fermi expects net proceeds of about $362.25 million, or up to $416.81 million if the additional notes are fully purchased. Approximately $30 million of the proceeds will fund the capped call transactions, with the remainder earmarked for general corporate purposes.
Trading Metrics
Fermi has a market capitalization of approximately $4.68 billion, with a 52-week high of $36.99 and a 52-week low of $4.47.
Over the past 12 months, FRMI shares have declined 77.50%.
Benzinga Edge Stock Rankings indicate FRMI has a positive price trend over the short and medium term, but a negative long-term price trend.
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