Cloudflare, Inc. announced the issuance of $2.50 billion in aggregate principal amount of 0% Convertible Senior Notes due 2031. The offering generated net proceeds of approximately $2.46 billion, which the company plans to use for general corporate purposes after funding related capped call transactions designed to reduce potential shareholder dilution.
Key Details
- Note Offering: Issued $2.50 billion in aggregate principal of 0% Convertible Senior Notes, which mature on August 15, 2031. The notes will not bear regular interest.
- Conversion Terms: The notes have an initial conversion price of approximately $496.94 per share, representing a 60% premium over the stock's closing price of $310.59 on August 10, 2026.
- Use of Proceeds: Net proceeds of approximately $2.46 billion will be used for general corporate purposes, including working capital and potential acquisitions, after allocating $259.5 million to fund capped call transactions.
- Dilution Mitigation: The capped call transactions are designed to reduce potential stock dilution upon conversion of the notes and have an initial cap price of $854.1225 per share.