Alteryx offering some convertible notes

The Alteryx share price has dipped to $121 or a bit lower in the after-hours in conjunction with this announcement.…

This could present a nice little short-term discount for a company that has been hitting on all cylinders business-wise for as long as I have been aware of it, which is about 7 quarters or so now.

long AYX (top 4 position) and frequent “post bumper” of when Saul took his initial full position back in December 2017


Thanks vol…the press release reads like gibberish to me.
“Convertible offerings” are very much a weak area for me.

Can anyone explain, in basic Engligh, why they are doing this, and for what purpose?

With such high GM, very stable high-growth, and this being a very mature company, I am a bit confused as to why they need to do this.


I had sold 1/2 my AYX, just to raise cash, earlier in the day, with plans to buy back later when dust from Trump/trade FUD subsided.


It’s two cvt note offerings - one will be used to pay off the existing one, and the other is for the standard “general corp purposes”, “acquisitions” and so forth. (rainy day money if you will)

Essentially the best time to raise nearly free money is: “Whenever you can”. And not when you need it.

They are still very much in hyper growth mode and will certainly use the money to fund bolt on acquisitions, expand their sales force, and improve (R&D) their product offerings.



Can anyone explain, in basic Engligh, why they are doing this, and for what purpose?

The really concise answer is to bring cash in the door.

I don’t remember exactly, but I think I saw something about a 0.5% coupon rate on these. That is super cheap. It would almost be silly not to take money at that cheap of a rate.

Having more cash available opens up tons of options and opportunities for a company. This gives them a big chunk of cash in excess of what they will generate from their operations within a short period of time. Much bigger slog of cash ='s much more optionality.

Also, I think I saw that they plan to retire 50% of a prior convertible offering they had, as well as probably hedge in some fashion to reduce possible future dilution in the event of the strike price of the convertible notes being exceeded.

Speculation on my part, but this offering makes me think that the chance that Alteryx is acquired by a much larger company (like maybe Microsoft) is decreased by at least some small amount. From that angle, I view this as a positive.

For one more tiny data point from my short-lived investing experience, I sold out of my Shopify position partially due to one of their convertible note or secondary equity offerings, which they conducted at a share price of about $137. That looks to have been a very dumb move on my part in retrospect.

long AYX, and if the above paragraphs don’t show it clearly enough, I see this move as not at all a negative for the long-term outlook of Alteryx as a business and holding within my own portfolio. I might even be tempted to go grab some shares in the after-hours…actually just did before I hit send.


Alteryx will issue two convertible notes:

– $350 mil + $50 mil potential addition due in 2024, and
– $350 mil + $50 mil potential addition due in 2026.

So in total, they will raise between $700-$800 million with this round of funding.

This is also from the press release: “The interest rate, conversion rate, offering price, and other terms are to be determined at the time of pricing of the offering.”

So basically we will have to wait on the details when they will be released.

Just as a reminder, Alteryx lastly borrowed $200 million for 0.5% interest in May 2018 for 5 years (due in 2023) and the conversion was only dilutive above $44.33 a share. The initial conversion price represented a premium of approximately 42.5% to the $31.11 per share closing price on May 15, 2018.

Of course, with the share price appreciation in the last year, they are waaay over the threshold of $44.33. I’m no banking expert but it would make sense to me to renegotiate these old senior notes in the face of what happened to the stock in terms of price appreciation. I’m pretty confident that Alteryx will get a sweet deal for this borrowing round and as I pointed out in a previous thread about Alteryx’ financing: every financially healthy company that has growth opportunities would be insane to pass up a deal like that.



it would make sense to me to renegotiate these old senior notes in the face of what happened to the stock in terms of price appreciation.

AYX cannot renegotiate those old notes, instead what they are doing is issuing new notes and using the proceeds to buy those old notes. While they are at it, they decided to issue another set of notes to raise some cheap money. At this time the terms of the offer are not available, they are still working on them. The conversion price will be much higher than current price and will use option pricing (i.e.,) there is an embedded call option, for 5 years and 7 years. So you are looking at conversion price around $175 to $200, I could be wrong here.


So you are looking at conversion price around $175 to $200

The conversion price is going to be $189.36, within my expected range. AYX now has a nice war chest. Good for them. The stock price just moved up by $5.