Many companies raise capital with Debt that has convertibility to equity. You pay a lower rate with the convertible feature. AYX is buying out convertible debt 2023 and replacing it with new issues with new longer terms 2025 and 2026 and higher conversion prices. They are raising about 700mm so about 8% of recent EV the close date is Aug 12. There are numerous hedging strategies going on by all the parties involved both new and unwinding of old hedges. Think of it as our own little “triple witching” but maybe going on for a week- a few days on either side of the transactions.
Several companies I follow are doing this and the volatility impacts others in the same sector, when investors don’t have any idea why the volatility is happening. Not everyone is playing the same game in the market at the same time, your long-term holdings will be affected by short term dislocations that mean nothing for equity holders with different time horizons. A big iceberg calved off making waves but the ocean with settle down after the transactions have been done…
And other stocks with complex financial transactions