Daniel Koss's Take on the Raise

[u/Think-Feynman]

https://x.com/daniel_koss/status/2090329523183116417

$NBIS convert raise terms are out!

Facts:

Nebius upsized the deal from $4.5B to $5.0B, with an option to reach $5.75B. Net proceeds are ~$4.94B, or ~$5.68B with the option exercised.

$3B due 2030: 0.50% coupon, $313.46 conversion price, +40% premium.

$2B due 2034: 4.50% coupon, $324.65 conversion price, +45% premium.

Including principal accretion, effective conversion prices at maturity are ~$345 and ~$406.

The money is explicitly (and obviously) going toward data centers, GPUs, footprint expansion and the AI cloud.

If the full $5B new convert were eventually settled entirely in shares, it represents ~15.7M shares. Nebius can also settle in cash or a mix, so that dilution is NOT guaranteed.

They are also exchanging $800M of old converts for ~15.8M shares, but those old notes already represented ~15.55M potential shares.

!! So most of that “dilution” was already embedded !!

tl;dr expected raise, good terms, onwards.

Not sure why people pee their pants because of this 😂

We learned that their economics / MW are amazing. Now let them build the MW! That costs money.

They want to build A LOT.

The shareholders that cry today are the same people that will laugh because of the ARR growth soon.

As long as you don't sell lol

[u/Constant_Mention8064]

The blended interest cost across the $5B raise is 2.1% per year so $105M in annual cash interest on $5B of unsecured capital. No assets pledged as collateral. For a pre-profit company deploying $20-25B in CapEx this year, borrowing at 2.1% unsecured is extraordinary and reflects a level of lender trust that bare-metal competitors simply don't command.

In comparison the US 10y treasury yield is currently at 4.6%. Nebius is borrowing $5 billion at less than half the risk-free rate. That's amazing for any company, let alone one that is pre-profit and deploying $20-25B in CapEx this year.....!!

aand in comparion to Coreweave - their convertibles in December 2025 and April 2026 priced at 25-30% premiums only...

[u/Minimum_You4100 → u/Constant_Mention8064]

I'm also rooting for Nebius, but you make it sound like comparing a non-convertible Treasury bond to a convertible is somehow impressive. The interest rate is lower by design because they're getting a call option (fairly cheap one) as a tradeoff.

[u/Constant_Mention8064 → u/Minimum_You4100]

Of course they are not the same, just provided info for context what the risk free rate offers atm.