Why Sunrun (RUN) Stock Is Trading Lower
Portfolio Pulse from Henry Khederian
Sunrun Inc (NASDAQ:RUN) shares dropped 4% to $12.26 after announcing a $475 million convertible senior notes offering due 2030, with an option for an additional $75 million. The notes have a 4.00% interest rate and an initial conversion price of $16.29 per share. Sunrun plans to use the proceeds for repurchasing its 2026 notes, capped call transactions, and general corporate purposes. Additionally, Sunrun's past 5-year annualized stock performance is -4.04%, projecting a potential future stock price of $10.11.
February 23, 2024 | 4:02 pm
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Sunrun Inc announced a $475 million convertible senior notes offering, causing a 4% drop in its stock price. The company plans to use the proceeds for repurchasing 2026 notes, capped call transactions, and general purposes. Historical performance suggests a future price of $10.11.
The immediate negative reaction in Sunrun's stock price is likely due to investor concerns over potential dilution from the convertible notes offering. The capped call transactions aim to mitigate this dilution, but the initial drop indicates market skepticism. The historical performance projection provides a bearish outlook, suggesting that without significant improvements, the stock might continue to underperform.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100