Even in early April, financially healthy tech companies were -- following the Fed's interest rate cuts and aggressive moves to support corporate debt markets -- having little trouble issuing debt and obtaining new credit facilities.
Over the last month or so, credit markets have been even more friendly to such tech companies, with many of them getting deal terms that are either comparable to or better than what they would have received in January and February.
And with markets having bounced sharply over the last two months, some tech companies have opted to raise capital via stock offerings.
Some recent tech debt offerings of note:
- Texas Instruments (TXN) sold $750 million worth of 1.75% senior notes due May 2030.
- Match Group (MTCH) sold $500 million worth of 4.625% senior notes due 2028, in part to redeem 2024 debt carrying a 6.375% interest rate.
- Uber (UBER) sold $900 million worth of 7.5% notes due 2025.
- Sea Limited (SE) sold $1 billion worth of convertible senior notes due 2025.
- Five9 (FIVN) sold $650 million worth of convertible senior notes due 2025.
- Silicon Labs (SLAB) announced on Wednesday it plans to sell $500 million worth of convertible senior notes due 2025.
Some recent tech stock offerings of note:
- Shopify (SHOP) sold 1.85 million shares at $700 apiece.
- Carvana (CVNA) announced that it plans to sell 5 million shares through "negotiated transactions" carried out by underwriters.
- Roku (ROKU) said that it plans to sell up to 4 million shares through an "equity distribution agreement" with Morgan Stanley and Citi.
- Fastly (FSLY) sold 6 million shares at $41.50 apiece.
The glass-half-full way of looking at such offerings: Tech companies are having little trouble raising funds that (provided the money isn't being used to pay down existing debt) leave them with a larger cash buffer and more capital to potentially deploy towards buybacks and/or strategic investments/acquisitions.
Also, even a company with major near-term business challenges such as Uber is able to raise debt right now, albeit at a higher interest rate than the ones profitable tech firms are generally paying.
The glass-half-empty way of looking at the offerings: A lot of companies that really don't have any need to raise money right now (TI, Silicon Labs, Match, Shopify, etc.), and haven't given any indication that they plan to spend their newly-raised funds anytime soon, have done so anyway.
That's arguably a sign that at least some of the tech companies raising fresh capital are worried that credit and/or equity markets won't remain this favorable for long, and that they feel they're better off striking while the iron is hot rather than risk having to do a capital raise down the line in less favorable conditions.