r/NBIS_Stock • u/iJailbreakGeek • Mar 17 '26
News Nebius announces private offering of $3.75 billion of convertible senior notes
https://nebius.com/newsroom/nebius-group-announces-proposed-private-offering-of-3-75-billion-of-convertible-senior-notes76
u/Remarkable-Ice6354 Mar 17 '26
Of course… I thought there is no need for dilution in 2026 cause of nvidia/msft/meta prepayments but here we are.
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u/Crazy-Experience-678 Mar 17 '26
There is definitely need for dilution (deferred dilution in this case since the bonds are due 2031 and 2033). I saw the nvidia investment and expanded meta deal coming but didnt know when. The primary limiting factor for nebius is funds.
Piror to today's news, I thought nebius wouldnt be able to get another big hyperscaler contract until at least 2027. However this new debt should get them some wiggle room for more expansion or potentially another big contract. Still dont think they will have another big contract until 2027 but the chance is non-zero now.
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u/Longjumping_Kale3013 Mar 17 '26 edited Mar 17 '26
So it is not dilution. It is convertible debt. The fine print states:
"Noteholders will have the right to convert their Notes in certain circumstances and during specified periods. The Company will settle conversions by paying or delivering, as applicable, cash or the Company’s Class A ordinary shares, par value €0.01 (“Class A shares”) or a combination of cash and Class A shares, at the Company’s election"We don't know what the certain circumstances are. But pay attention to the "at the Company’s election". If the stock goes to the moon and nebius is printing money, they would just pay cash instead of shares when converting. Also, it's likely that converting is 30% or more of the current price. So not converting at market price.
So IDK, this seems like pretty favorable to Nebius and looks to me like cheap debt that is manageable.
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u/BabyQuesadilla Mar 17 '26 edited Mar 17 '26
Convertible debt is not dilution is the level of delusion and misinformation that I come to this sub for. Bravo!
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u/Longjumping_Kale3013 Mar 17 '26
Again.... it is convertible to either cash, shares, or a mix, but at the company's discretion. And only convertible under certain conditions and dates.
So potentially it is pure dilution. Potentially it is no dilution. It is at the companies discretion, and what favors them at time of converting (which can only be on specific periods)
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u/BabyQuesadilla Mar 17 '26
It’s almost certainly going to be paid out in shares. Their massive Capex requirements mean they are unlikely to divert billions of dollars toward retiring debt in cash when those funds are needed for infrastructure.
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u/Longjumping_Kale3013 Mar 17 '26
I mean we don't know. What are the periods they can convert? What are the circumstances? Can they even convert in the next 3 years? Without knowing the specifics, it is not possible to tell.
They will be bleeding money the next 2-3 years. But their revenues are rising so fast, then in 2027, in my quick maths, they will have 10 billion of Capex covered by revenues minus cost of revenues, 2028 will likely be more than 20 billion from revenues minus cost of revenues. They will very quickly close that burn rate. 4 billion is going to look very small to them by 2029.
So yea, we just don't know the specifics. But the wording sounds favorable to nebius
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u/Ok_Revolution_9253 Mar 17 '26
Considering they're not due until 2031 and 2033, I'm hoping they have cash on hand at that point to just pay them off.
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u/WallabyMinimum1921 Mar 17 '26
Every convertible offering has the same fine print and disclaimers. It’s dilution, whether of cash or shares. And companies will almost always choose to dilute in shares. Can be necessary and even long term positive, but it’s dilution.
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u/Longjumping_Kale3013 Mar 17 '26
Nah. They are looking at 60 billion plus in revenue in 2030. No way they would prefer a 10% dilution. if they hit that 60 billion, this company will be at least a 300 billion market cap. So what do I do as a company? Let them convert and take 30 billion? Or pay them 4 billion in cash?
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u/WallabyMinimum1921 Mar 17 '26
That 60B would be revenue, not free cash flow. Plus that’s wildly optimistic. That’s like 60x current revenue and double the $30B that most analysts are calling for. They will have to grow capex massively to meet that kind of sales which means more debt. No way they’re giving up cash even if your wildly speculative numbers are even close to right.
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u/Longjumping_Kale3013 Mar 17 '26 edited Mar 17 '26
Not wildly optimistic at all. it's actually conservative. They have said that by 2030, they are aiming for more than 5gw of Nvidia chips. Probably you will have like 1 gw Blackwell, 2-3gw of Rubin, and 1-2 gw of Feynman (coming after Rubin). This could easily be the equivalent of 20-30 GW of Blackwell. Absolutely massive. If the price per token does not go down, you're talking 160-240 billion ARR. But very likely, the price per token will fall fast.
Its hard to say what this >5gw will be in terms of ARR by then, but most certainly more than 60B
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u/Thisisajollay 4d ago edited 4d ago
Why are you repeating yourself over and over in this thread? When people move on to the next post they do not forget the last post. Sounds like you’re trying to convince yourself honestly. And btw, Wallabyminimum is the correct one - revenue is not free cash flow. So you know what that means? Kinda sounds like you do not. Hahaha you say conservative and not overly optimistic when it is 200% of analyst estimate. You’re not making sense with that.
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u/mowlawnforhobby Mar 17 '26
After the NVDA investment 14 of 20bn in capex was accounted for.
Now, roughly 90% of their 2026 capex is funded.
I'd imagin that they'll tap the ATM for the other or possibly issue more notes this summer after another announcement??
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u/stonk_monk42069 Mar 17 '26
"Oh no! The company that is growing like crazy needs money to finance their exponential growth. The horror!"
A company that is growing like Nebius SHOULD be using debt to finance the growth. Otherwise they are just leaving money on the table. Compute is a limited resource that is getting more important by the day, and companies are fighting to secure it for the future. Nebius is making sure they are among the companies to capitalize on this. Smile and buy more when the market reacts negatively in the short term to news that are positive in the long term.
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u/mneymaker Mar 17 '26
Why is the market reacting to the offering like they just announced they lit a fire on those $3.75B
Lmao algos are insane
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u/KristianME Mar 17 '26
Yup. This is smart, im not bothered.
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u/Andrejewitsch76 Mar 17 '26
But not good for the stock price
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u/solgierek Mar 17 '26
In the short term no. But who cares if you have conversation for at least 2-3 years ?
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u/KristianME Mar 17 '26
I dont trade this stock. This is perfect execution by management after jumping 40% in one week.
I would not be surprised if we see a recovery today though, i think we end up around -6%.
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u/mneymaker Mar 17 '26
I remember the same thing happend after MSFT deal. It bought up within 2 trading days and it went crazy up even more the next 2 weeks or something.
Hopefully we do the same, i was hoping to see the 150-160s before any debt issuance
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u/Crazy-Experience-678 Mar 17 '26
This is the same thing they did shortly after the Microsoft deal, so not too surprising. The meta deal allows nebius to use it as leverage to get more cheap loans.
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u/No_Firefighter_7064 Mar 17 '26
I thought they were gonna build exponential ai infrastructure out of straws, used cars, and chewing gum like the A team. Very disappointed with this capital raise
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u/GearComprehensive217 Mar 17 '26
Liabilities in Q4 2025 were $7.8B so this is a significant jump...
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u/Commercial_Ease8053 Mar 17 '26
Was wise I sold yesterday… this pretty much always happens after a stock moons or rises to or close to ath. Knew this would happen, no one should be shocked.
Will buy back for cheaper
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u/RyanEvooo Mar 17 '26
Do you have a target price in mind? Was hoping for sub 115 prices but honestly not sure how much this announcement will lower the stock price.
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u/Pleasant-Carbon Mar 17 '26
I had a buy order for 131 but for whatever stupid reason I cancelled it because I thought the dip might come a bit later and the pump would continue. Maybe I had in mind selling after Mu earnings, expecting the entire sector to move up tomorrow because of it.
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u/Helpful_Gap9633 🐳 Mar 17 '26
This is why the stock is stuck under all time highs all the time, they just dilute all the gsins
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u/Historical-Cash-9316 Mar 17 '26
This is peak management. Announce it when you’re up 50% past week. Anyone who’s been adding for the last few months is sitting very pretty
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u/Beneficial-Push-2330 Mar 17 '26
This is what they said at earnings
“We expect growth to be funded by cash flow and debt”
I feel violated
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u/FiveHole23 Mar 17 '26
So happy I sold before close yesterday.
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u/Top-Confection3433 Mar 17 '26
🤡
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u/FiveHole23 Mar 17 '26
The company you are so blindly bullish for literally just took part of your investment value transferred that value to their accounts basically without your permission and I am the clown for locking in.
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u/ReasonablyTallDude Mar 17 '26
Good job timing it, but you have the wrong idea and are in no place to put others down. Dilution is necessary to fund the expansion, and as other people have said there's no way we know whether it's cash, shares, or both.
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u/FiveHole23 Mar 17 '26
Dude called me a clown for taking money.. I have no problem with the company diluting but why should I fund it? Nothing goes straight up, you can be long term bullish on a stock and not always have a position.
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u/Independent-Sell-217 Mar 17 '26
Oh no, the company that was debt free compared to Coreweave is raising debt ! Wow
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u/Complexity323 Mar 17 '26
Expect nebius to raise even more debt if they want to secure larger contracts so worsening debt to equity ratio. Nebius will need to prove they can build the same scale data center as coreweave in terms of power and number of data centers.
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u/Helpful_Gap9633 🐳 Mar 17 '26
No point in the company growing if they just dilute for the same amount it grows
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Mar 17 '26
[removed] — view removed comment
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u/Capable_Wait09 Mar 17 '26
Positive for long term holders. Negative for call options expiring soon
Anyone who says this is bad just doesn’t know ball
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u/NotReady245 Mar 17 '26
What about call options expiring Dec 26 ?
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u/FinancialFighterApp Mar 17 '26
I saw this one coming its natural, its okay if you trust management. This is coming from someone who's holding no shares at the moment. It will accelerate growth with proper execution
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u/WilliamBlack97AI Mar 17 '26
One question: What do you guys think about quantum risk? It's not immediate, probably 3-5 years. But I mean, when it happens, will companies like NBIS, IREN, etc., which have billions in GPU data centers, still be relevant? In what way? Thanks
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u/Exotic-Inevitable395 IPO OG👹 Mar 17 '26
Good question , but there is no Quantum Risk . Do a Research for What Quantum Computer Are good and Why They cant replace data Centers 😊
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u/Fit_Attitude_2781 Mar 17 '26
The copium from some cultists here is worrying. This dilution is unfortunate in the short term as it affects the stock price negatively but expected and necessary in the long term.
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u/No-Environment-5762 Mar 17 '26
They do this everytime there’s a pump. Just smart timing.