TLDR
- WhiteFiber (WYFI) fell 25% in after-hours trading after announcing a $250 million convertible senior notes offering
- The notes are due 2032 and will be offered in a private placement to qualified institutional buyers
- Proceeds will go toward data center expansion, GPU servers, and potential acquisitions
- During regular trading Tuesday, the stock was already down 8.5% to around $27.78
- 11 analysts rate WYFI a Buy with an average price target of $36.08
WhiteFiber (WYFI) stock dropped 25% in after-hours trading Tuesday after the company announced plans to raise $250 million through a convertible senior notes offering. The stock had already been under pressure during the regular session, falling 8.5% to around $27.78, with volume running 74% below its daily average.
WhiteFiber, Inc. Ordinary Shares, WYFI
The notes are due in 2032 and will be offered in a private placement to qualified institutional buyers. WhiteFiber is also giving initial purchasers the option to buy an extra $37.5 million in notes on top of the base amount.
The notes will be senior unsecured obligations and will pay interest semiannually. When converted, WhiteFiber can settle in cash, ordinary shares, or a mix of both.
How WhiteFiber Plans to Use the Money
The bulk of the proceeds are earmarked for data center expansion. That includes leasing or buying new properties, construction costs, energy service agreements, and purchasing GPU servers for its cloud business.
WhiteFiber also flagged that it may use funds for acquisitions, partnerships, and joint ventures, as well as general working capital. The company noted it will still need additional project financing, such as construction loans, to fully execute on those plans.
The interest rate, conversion rate, and other key terms will be set at the time of pricing.
Before Tuesday’s selloff, WhiteFiber’s most recent quarterly results were mixed. The company reported a loss of $0.39 per share, slightly better than the $0.40 loss analysts expected. Revenue came in at $28.84 million.
Net margin remained deeply negative at -46.87%, and return on equity was -10.72%. Analysts forecast a full-year EPS of -$0.97.
What Analysts Are Saying
Analyst sentiment on WYFI remains broadly positive despite the stock pressure. Of the 14 analysts covering the name, 11 rate it a Buy, two rate it Hold, and one rates it Sell. The consensus is “Moderate Buy” with an average price target of $36.08.
Recent moves include Needham lifting its target from $38 to $41 with a Buy rating. Cantor Fitzgerald upgraded the stock from Neutral to Overweight, raising its target from $27 to $36. BTIG maintained its Buy rating with a $50 target.
Barclays moved its target from $29 to $32, though it kept an Equal Weight rating.
The stock’s 50-day moving average sits at $30.42, while the 200-day moving average is $23.01. Market cap stands at approximately $1.06 billion.
Several institutional investors added new positions in WYFI during the fourth quarter, including Strs Ohio, Royal Bank of Canada, and MetLife Investment Management.
The offering terms, including the final conversion rate and interest rate, had not been set as of the announcement.
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