Snap Announces $750M Note Offering Following Stellar Q1 Earnings

Snap Inc (SNAP) announced today that it intends to offer $750 million of convertible senior notes due 2025 in a private placement to institutional buyers.The purchasers of the notes will also receive an option to buy up to an additional $112.5 million of notes.“The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering” the press release says.Snap intends to use the proceeds from the offering for general corporate purposes such as operating expenses, and possibly also for acquisitions or repurchases of SNAP stock.However the camera company added that it has no commitments for any material acquisitions or stock repurchases at this time.The news follows Snap’s surprisingly strong first quarter earning results, with revenue and daily active user numbers coming in well above Street estimates. Notably, Snap also reported its first quarter of positive Operating Cash Flow at $6 million.“With a larger Direct Response (DR) business than we previously estimated and Snap’s strength in COVID-Strong Ad Verticals (Gaming, eCommerce, Streaming), we believe the company is incrementally better positioned to deal with COVID-19’s impact” commented RBC Capital analyst Mark Mahaney on April 22.In a report titled ‘rocket-like resilience’, the analyst reiterated his buy rating while bumping up his SNAP price target to $21 from $18 previously.Overall SNAP shows a cautiously optimistic Moderate Buy rating from the Street. Meanwhile the average analyst price target of $18 indicates marginal upside potential of 3%. Shares are currently up 4% year-to-date, following a massive 30% gain post-earnings release. (See Snap stock analysis on TipRanks).Related News: AT&T Releases Weak 1Q20 Results, But Ample Cash to Support Dividend Disney Heiress Slams $1.5 Billion Executive Bonuses Amid Furloughs ‘Safe Haven’ Lockheed Martin Approves Dividend Payout More recent articles from Smarter Analyst: * Lam Research’s Solid Customer Demand Sparks Multiple Buy Ratings * ‘Safe Haven’ Lockheed Martin Approves Dividend Payout * O’Reilly Auto Reports Better-Than-Feared Q1 Earnings; Shares Up 3% * AT&T Releases Weak 1Q20 Results, But Ample Cash to Support Dividend Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Snap Inc (SNAP) announced today that it intends to offer $750 million of convertible senior notes due 2025 in a private placement to institutional buyers.” data-reactid=”12″>Snap Inc (SNAP) announced today that it intends to offer $750 million of convertible senior notes due 2025 in a private placement to institutional buyers.

The purchasers of the notes will also receive an option to buy up to an additional $112.5 million of notes.

“The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering” the press release says.

Snap intends to use the proceeds from the offering for general corporate purposes such as operating expenses, and possibly also for acquisitions or repurchases of SNAP stock.

However the camera company added that it has no commitments for any material acquisitions or stock repurchases at this time.

The news follows Snap’s surprisingly strong first quarter earning results, with revenue and daily active user numbers coming in well above Street estimates. Notably, Snap also reported its first quarter of positive Operating Cash Flow at $6 million.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“With a larger Direct Response (DR) business than we previously estimated and Snap’s strength in COVID-Strong Ad Verticals (Gaming, eCommerce, Streaming), we believe the company is incrementally better positioned to deal with COVID-19’s impact” commented RBC Capital analyst Mark Mahaney on April 22.” data-reactid=”18″>“With a larger Direct Response (DR) business than we previously estimated and Snap’s strength in COVID-Strong Ad Verticals (Gaming, eCommerce, Streaming), we believe the company is incrementally better positioned to deal with COVID-19’s impact” commented RBC Capital analyst Mark Mahaney on April 22.

In a report titled ‘rocket-like resilience’, the analyst reiterated his buy rating while bumping up his SNAP price target to $21 from $18 previously.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Overall SNAP shows a cautiously optimistic Moderate Buy rating from the Street. Meanwhile the average analyst price target of $18 indicates marginal upside potential of 3%. Shares are currently up 4% year-to-date, following a massive 30% gain post-earnings release. (See Snap stock analysis on TipRanks).” data-reactid=”20″>Overall SNAP shows a cautiously optimistic Moderate Buy rating from the Street. Meanwhile the average analyst price target of $18 indicates marginal upside potential of 3%. Shares are currently up 4% year-to-date, following a massive 30% gain post-earnings release. (See Snap stock analysis on TipRanks).