ATLANTA - Cardlytics, Inc. (NASDAQ: NASDAQ:CDLX), an advertising platform within bank channels, has announced the pricing of a $150 million private offering of 4.25% convertible senior notes due in 2029. The sale is expected to close on April 1, 2024, subject to customary closing conditions. Additionally, initial purchasers have a 13-day option to buy up to an additional $22.5 million in notes.
The notes, which are senior, unsecured obligations of the company, will pay interest semi-annually and are set to mature on April 1, 2029, unless converted or repurchased beforehand. Conversion rights are subject to certain conditions before January 2, 2029, but thereafter, noteholders can convert at will until the day before maturity. Cardlytics will settle conversions with cash, shares of its common stock, or a mix, at its discretion.
The initial conversion rate is set at 55.4939 shares per $1,000 principal amount, equivalent to a conversion price of about $18.02 per share. This price is a 32.5% premium over Cardlytics' common stock's last reported sale price of $13.60 on March 26, 2024. The conversion rate and price will adjust with certain events, and the notes are not redeemable by Cardlytics before maturity. In the event of a "fundamental change," noteholders may require Cardlytics to repurchase their notes at the principal amount plus accrued interest.
Cardlytics anticipates net proceeds of approximately $144.5 million, or $166.3 million if the additional notes are fully purchased. These funds, along with cash on hand, are intended to repurchase around $183.9 million of its 1.00% convertible senior notes due 2025 in private transactions. The repurchase of the 2025 Notes is not contingent on the new offering.
The company also notes that the hedged holders of the 2025 Notes may engage in transactions that could affect the market price of Cardlytics' common stock, potentially influencing the effective conversion price of the new notes.
InvestingPro Insights
As Cardlytics, Inc. (NASDAQ: CDLX) navigates its latest financial maneuver with the private offering of convertible senior notes, the company's stock metrics provide a broader context for potential investors. According to real-time data from InvestingPro, Cardlytics' market capitalization stands at $653.03 million, reflecting the scale of the company within its sector. Despite not being profitable over the last twelve months, analysts are optimistic, predicting profitability this year, which could be a significant turnaround for the company.
The stock's Price / Book ratio for the last twelve months as of Q4 2023 is 4.84, indicating a high valuation relative to the company's net asset value, which can be a point of consideration for value-focused investors. Meanwhile, the company's revenue growth shows a positive trend, with a quarterly increase of 8.08% in Q1 2023. This could signal underlying business strength amidst the broader market conditions.
InvestingPro Tips suggest that Cardlytics has experienced a strong return over the last month, with a 66.26% increase, and over the last three months, with a 42.11% increase. This recent performance may catch the eye of momentum investors looking for stocks with upward trajectories. However, the stock is known to trade with high price volatility, which could mean higher risk for potential investors.
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