Penguin Solutions falls after $650 mln convertible bond sale
BUZZ-Penguin Solutions falls after $650 mln convertible bond sale ** AI data center infrastructure provider Penguin Solutions' PENG.O shares down 7.7% to $71.80 after clinching capital raise
** PENG late Tues announced pricing private offering of $650 mln 0% convertible bonds (CBs) due Aug 1, 2031
** Initial conversion price of $116.70 represents 50% premium to stock's last close of $77.80
** Co intends to use approx $298.1 mln of net offering proceeds to repurchase its 2% CBs due 2029 and 2% CBs due 2030, $100 mln to repay credit agreement, remainder for general purposes
** It also expects to use approx $42.6 mln to fund capped call transactions to offset potential dilution
** Fremont, California-based PENG has about $3.7 bln current market cap
** Stock now up 170% over the past three months and hit record intraday high of $89.86 last Thurs
** 7 of 8 analysts rate the stock "strong buy" or "buy", 1 "hold"; median PT $77.50, per LSEG data
(Lance Tupper is a Reuters market analyst. The views expressed are his own)
((lance.tupper@tr.com 1-646-279-6380))