ATLANTA - Cardlytics, Inc. (NASDAQ: NASDAQ:CDLX), a digital advertising platform, has announced its intention to offer $150 million in convertible senior notes due in 2029 to qualified institutional buyers, subject to market conditions. The private offering is pursuant to Rule 144A under the Securities Act of 1933, as amended.
Moreover, Cardlytics expects to give initial purchasers an option to buy up to an additional $22.5 million in notes within 13 days of issuance. These senior unsecured obligations will mature on April 1, 2029, unless converted or repurchased earlier by the company. The notes will accrue interest payable semi-annually and noteholders will have the right to convert their notes under certain conditions.
The interest rate and initial conversion rate will be set during negotiations with the initial purchasers at the time of pricing. Cardlytics plans to use part of the net proceeds to repurchase a portion of its 1.00% convertible senior notes due in 2025 in privately negotiated transactions. The remaining funds are expected to be allocated for general corporate purposes.
In the event of specific corporate changes, noteholders may require Cardlytics to repurchase their notes for cash at the principal amount plus any accrued interest. The terms of these repurchases will vary based on several factors, and there is no guarantee on the amount of 2025 Notes that will be repurchased or their repurchase terms.
The announcement also mentioned potential market activities by noteholders that could affect the market price of Cardlytics' common stock. This includes the unwinding of hedge positions and derivative transactions related to the company's stock, which could influence the effective conversion price of the notes.
Cardlytics may also terminate a portion of its existing capped call transactions if any of the 2025 Notes are repurchased. This could involve the option counterparties or their affiliates undertaking market transactions that might impact the market price of the company's common stock and the market value of the notes.
The notes and any shares of common stock issuable upon their conversion will not be registered under the Securities Act or any other jurisdiction's securities laws and cannot be offered or sold without registration or an exemption from registration requirements.
This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offering of the notes is not contingent upon the repurchase of the 2025 Notes.
InvestingPro Insights
As Cardlytics, Inc. (NASDAQ: CDLX) navigates through its strategic financial maneuvers with the offering of convertible senior notes, real-time data and insights from InvestingPro paint a broader picture of the company's current market standing. With a market capitalization of $972.34 million, Cardlytics is operating at a significant scale within the digital advertising sector.
Despite the company's negative P/E ratio of -13.36 for the last twelve months as of Q1 2023, indicating that it has not been profitable during this period, the firm's gross profit margin stands robust at 42.17%, suggesting effective cost management in its core operations.
Investors may find the company's stock volatility and recent performance particularly noteworthy. Cardlytics has experienced a significant return over the last week, with a price total return of 43.62%.
Moreover, the stock has been trading near its 52-week high, at 98.68% of the peak price, reflecting investor optimism and a potential belief in the company's future growth prospects. This is further supported by a notable one-year price total return of 658.43%, indicating strong investor sentiment over the past year.
For those considering a deeper dive into Cardlytics' prospects, InvestingPro Tips reveal that the stock generally trades with high price volatility, which could be an important consideration for investors with varying risk appetites. Additionally, the company's liquid assets exceed short-term obligations, which may provide some reassurance regarding the company's liquidity and ability to meet immediate financial commitments.
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