Annual Sale: Get $200 Off. Ends in
day
hour
minute
second
Snap CEO Evan Spiegel. Photo by Bloomberg
Markets

Tech Companies Lead Convertible Debt Surge

Photo: Snap CEO Evan Spiegel. Photo by Bloomberg

When Snap raised $1.27 billion in a convertible note offering earlier this month, it answered a longstanding question that Wall Street had about the messaging company: When and how would it raise capital to cover its ongoing cash burn? Until recently, Snap’s stock was too low to allow for an equity-raising, while borrowing money might have been costly given Snap’s lack of profits.

The convertible note offering provided a neat solution: Snap can wait seven years to repay the money either in cash or by issuing stock. The decision to go this route is the latest example of convertible notes' increasing popularity among tech companies as a way of raising money. In the past year, Tesla, Twitter, Square, Atlassian and Splunk have also sold convertible notes. 

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
The Briefing
Salesforce Pays Up for Slack: The Information’s Tech Briefing
Salesforce Pays Up for Slack: The Information’s Tech Briefing
Salesforce chief Marc Benioff could never be accused of underpaying for a company, as his proposed $27.7 billion cash-and-stock purchase of Slack demonstrates. Salesforce’s price for the enterprise messaging firm is more than a 50% premium over where Slack’s stock was trading before news of the deal broke. The idea that someone else might jump in with a competing bid now seems...
Latest Briefs
 
Trump Threatens Veto of $740 billion Defense Bill Over Sec. 230
India’s Tata in Talks to Buy Alibaba-Backed Online Grocery Startup
Netflix to Double Spending on Original Content in Asia
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Slack Deal Could Fulfill Salesforce Chief’s Decade-Old Vision
Startups Microsoft
Slack Deal Could Fulfill Salesforce Chief’s Decade-Old Vision
Salesforce co-founder and CEO Marc Benioff has long had a vision of replacing email with new forms of collaboration software, though his attempts to build that future have mostly fizzled.
Salesforce Goes After Slack: The Information’s Tech Briefing
The Briefing
Salesforce Goes After Slack: The Information’s Tech Briefing
Just in time for the holidays, we have a possible big enterprise software merger. Salesforce’s interest in buying Slack, first reported by the Wall Street Journal , shouldn’t come as a surprise to anyone.
The Information’s Guide to 10 Must-Stream TV Shows
Media/Telecom Entertainment
The Information’s Guide to 10 Must-Stream TV Shows
The holiday season is a great time to curl up on the couch and immerse yourself in a streaming television show—and that is triply true when a pandemic has fouled up travel and most other opportunities for entertainment.
Insider’s Parent Axel Springer Wants to Help Drive US Media Mergers
Q&A
Insider’s Parent Axel Springer Wants to Help Drive US Media Mergers
Axel Springer, the German owner of Business Insider, is ready to take part in a second wave of consolidation in the U.S.
Amazon Drops Pandemic Test to Track Warehouse Workers Through Wi-Fi
Exclusive Policy COVID-19
Amazon Drops Pandemic Test to Track Warehouse Workers Through Wi-Fi
Amazon has promised to spend billions of dollars this year on safety precautions to protect the workers in its warehouse facilities from the coronavirus pandemic.
Facebook Has a Recipe For Better Social Media. Why Isn’t The Company Using It?
Opinion Facebook
Facebook Has a Recipe For Better Social Media. Why Isn’t The Company Using It?
A New York Times article this week about the struggles within Facebook to get a handle on disinformation after the election illuminates a fascinating idea: surveying users to generate training data for artificial intelligence algorithms.