Fabrinet jumps after share-purchase warrant deal with Amazon

Fabrinet

13/03/2025 17:43

** Shares of outsourced optical components maker Fabrinet FN.N up 8.1% to $218.23 on Thurs after inking warrant deal with Amazon.com AMZN.O

** FN shares, which rose as high as $228.11 earlier in the session, on track for biggest one-day pct advance since Aug 20

** Fabrinet early Thurs said it issued a warrant to an AMZN affiliate buy up to 381,922 of its shares at exercise price of $208.48. FN shares closed Weds at $201.88

** Under the deal terms, the 10-yr warrant allows for vesting in multiple tranches over the term of the warrant based on payments to Fabrinet from either Amazon or its affiliates

** If Fabrinet is acquired, or its commercial agreement with Amazon gets terminated by the e-commerce giant for cause, unvested portion of the warrant to vest in full

** Fabrinet said warrant issuance expected to result in non-cash stock-based accounting adjustment to rev of ~$4.2 mln and negatively impact earnings by 12 cents/sh

** As such, co reduced its fiscal Q3 profit outlook to $2.20-$2.28 and adj EPS of $2.43-$2.51

** With move on Thurs, FN shares down ~1% YTD following nearly 16% gain in 2024

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))