On August 13, Cloudflare, Inc. rose 3.02% in regular trading, trading at $321.86/share, with turnover of $159 million. The stock is rebounding as the market gradually absorbs the short-term shock from the company's announced convertible debt offering.
Cloudflare previously announced plans to privately place $2.175 billion in convertible senior notes due 2031, with initial purchasers holding an option for up to an additional $325 million. The dilution concerns drove the stock down to approximately $298 on August 11, a decline of 3.53%. As the market has now priced in the potential equity dilution risk, the stock is recovering toward pre-announcement levels.
The convertible notes offering followed a strong Q2 earnings report on August 6, in which the company posted revenue of $696.1 million (up 35.8% year-over-year, beating the $664.7 million estimate) and adjusted EPS of $0.29 (versus the $0.27 consensus). The company also raised full-year guidance and received multiple analyst price target increases, with Oppenheimer, Morgan Stanley, and Mizuho setting targets between $370 and $380.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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