DocuSign’s stock slips after pricing of upsized convertible notes offering, which won’t pay regular interest

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Shares of DocuSign Inc. slipped 0.6% in premarket trading Wednesday, after the electronic signature company announced the pricing of an upsized offering of convertible notes. The $600 million in senior notes due 2024, which was increased from the original announcement late Tuesday of a $500 million offering, will not pay regular interest, and the principal amount of the notes will not accrete. The notes can be converted after Oct. 15, 2023 into cash, DocuSign common shares or a combination of both. The initial conversion rate into shares implies a price of $420.24 per share, which is 60% above Tuesday’s closing price of $262.65. DocuSign plans to use the proceeds from the offering to repurchase 0.50% convertible notes due 2023 and for working capital. The stock has soared 254.2% over the past 12 months through Tuesday, while the S&P 500 has gained 15.6%.
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