Snap (NYSE: SNAP) stock rallied on Monday following the announcement of its plans to repurchase convertible debt worth $451 million.
In a strategic move to alleviate its financial burdens, Snap (SNAP), the parent company of Snapchat, has unveiled plans for debt buybacks. The social media company disclosed its intention to repurchase its 0.25% and 0.75% convertible senior notes due in 2025 and 2026, respectively.
Under the terms of the agreements reached through private negotiations, Snap has committed to repurchasing its 2025 notes for $97.8 million, representing a significant discount from their face value of $100 million. Similarly, the company will acquire its 2026 notes for $336.4 million, compared to their face value of $351.2 million. This move will result in substantial savings for Snap on debt repayments.
These buyback transactions are slated to be finalized on February 14, according to the company’s announcement.
The decision follows a tumultuous period for Snap, marked by a 35% plunge in its share price on the New York Stock Exchange earlier in the week. The stock nosedive came in response to disappointing financial results and outlook from the Santa Monica-based firm.
Snap (NYSE: SNAP) Stock Performance
SNAP stock rose 4.77% to close at $11.64 on Monday. The traders had exchanged hands with 62,918,668 (62.91 million) shares compared to the average daily trading volume of 28.96 million.
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