Smart Global drops after convertible debt deal unveiled

Penguin Solutions

01/08/2024 16:19

** Shares of Smart Global Holdings  SGH.O  down 5% at $22.24
on Thurs as memory chipmaker seeks capital raise
    ** Co late Weds announced private offering of $150 mln 6-yr
convertible bonds (CBs)
    ** It plans to use net proceeds to pay for capped calls,
repurchase portion of existing 2.25% CBs due 2026
    ** Co has ~$1.2 bln market cap, per LSEG
    ** Last month, it announced $200 mln investment from South
Korea's SK Telecom  017670.KS  to improve its financial
flexibility, and intent to rebrand as Penguin Solutions
    ** With move on the session, SGH up 17.5% YTD vs Nasdaq's
 .IXIC  16% advance
    ** All 4 analysts covering SGH are bullish and their median
PT is $33.50, up from $27.25 on Jul 1

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))