3H·

Convertible Bond Conclusion (in discourse with ChatGPT)

$IREN (-2,08%)

Conclusion:

My assessment: the structure is more positive than negative for existing shareholders.

Not because there is no dilution - there potentially is. But because IREN:

- raises a lot of capital,

- pays a coupon of only 1%,

- the conversion only starts at around USD 73,

- strongly cushions the dilution through capped calls up to approx. 110 USD.

For me, this is a pretty good financing deal. The market will now ask less: "Is the convertible bond dilutive?" - but rather: "Can IREN generate a return above the dilution costs with this USD 2.6-3.0bn capital?"

If the Nvidia/AI cloud case works out, this convertible bond is more of an accelerator. If the execution disappoints, it is of course additional leverage in an already very ambitious equity story.

In any case, it was an intensive exchange in which I also repeatedly triggered the negative points. Today, of course, I would have preferred $NBIS (+15,85%) but I still feel comfortable in the long term 🙂

VG micha

4 Commenti

Investment_Inka@Investment_Inka

The solution is simple 😜 I've had both in my portfolio since the beginning/middle of last year and I'm still holding on to them. I still see a lot of potential for NBIS in particular in the long term due to its broad exposure

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Olli@Olli68

They have already been diluting the number of shares extremely for 2 years, especially at the beginning of this year. This convertible bond is just a drop in the ocean.
Incidentally, that was one of the reasons why I left the company six months ago.

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Michey777@Michey777

@Olli68 At the beginning of this year? The share issues will be used for the takeovers, among other things. And the new bond will be diluted from a share price of $110.

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Olli@Olli68

@Michey777 No, they issue new shares throughout the year. And although the last volume from the end of last year has not yet been exhausted, they have already decided on the next additional issue of new shares in January or February. These will be used to buy chips.
I just wonder when this dilution will stop. Because in 3-4 years at the latest they will need new, more modern chips.

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