Fastly Announces Proposed Private Placement of $750 Million of Convertible Senior Notes

Rhea-AI Summary

Fastly, Inc. (NYSE: FSLY) announced its intention to offer $750 million in Convertible Senior Notes due 2026 to qualified institutional buyers. An additional $112.5 million may also be available to initial purchasers. The notes will be unsecured, with interest payable semiannually, and can convert into cash or shares of Fastly's common stock. Proceeds will support working capital and potential strategic investments. The offering will not be registered under the Securities Act, limiting its resale options. Fastly emphasizes that it does not currently plan any acquisitions.

Positive

• Offering $750 million in Convertible Senior Notes provides potential capital for growth.
• Additional $112.5 million option for initial purchasers enhances funding capability.
• Intended use of proceeds for working capital and strategic investments supports financial stability.

Negative

• Convertible notes may lead to dilution of existing shareholders if converted to stock.
• Restrictions on resale of notes limit liquidity for investors.

Fastly, Inc. (NYSE: FSLY) (“Fastly”) today announced that it intends to offer, subject to market conditions and other factors, $750 million aggregate principal amount of Convertible Senior Notes due 2026 (the “notes”) in a private placement (the “offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Fastly also intends to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $112.5 million aggregate principal amount of notes.

The notes will be general unsecured obligations of Fastly and will accrue interest payable semiannually in arrears. Upon conversion, Fastly will pay cash or deliver, as the case may be, cash, shares of Fastly’s Class A common stock (the “common stock”) or a combination of cash and common stock, at its election. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering.

Fastly expects to use the net proceeds from this offering for working capital and other general corporate purposes. Fastly may also use a portion of the net proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies. Fastly does not currently have any plans for any such acquisitions or investments.

The notes and any shares of common stock issuable upon conversion of the notes have not been and will not be registered under the Securities Act, any state securities laws or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.

About Fastly

Fastly (NYSE: FSLY) helps people stay better connected with the things they love. Fastly’s edge cloud platform enables customers to create great digital experiences quickly, securely, and reliably by processing, serving, and securing our customers’ applications as close to their end-users as possible — at the edge of the Internet. The platform is designed to take advantage of the modern internet, to be programmable, and to support agile software development. Fastly’s customers include many of the world’s most prominent companies, including Pinterest, The New York Times, and GitHub.

Forward-Looking Statements

This press release contains “forward-looking” statements that involve risks and uncertainties, including statements concerning the proposed terms of the notes, the completion, timing and size of the proposed offering of the notes and the anticipated use of proceeds from the offering. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from Fastly’s plans. These risks include, but are not limited to, market risks, trends and conditions, and those risks included in the section titled “Risk Factors” in Fastly’s Securities and Exchange Commission (“SEC”) filings and reports, including its Annual Report on Form 10-K for the year ended December 31, 2020 and other filings that Fastly makes from time to time with the SEC, which are available on the SEC’s website at www.sec.gov. All forward-looking statements contained in this press release speak only as of the date on which they were made. Fastly undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210302005621/en/

FAQ

What is Fastly's recent financial offering announcement?

Fastly announced a $750 million offering of Convertible Senior Notes due 2026.

How much additional capital can Fastly raise through the notes offering?

Fastly may raise an additional $112.5 million from initial purchasers' option.

What will Fastly use the proceeds from the notes for?

The proceeds will be used for working capital and possibly for strategic acquisitions.

Are the notes being offered by Fastly registered under the Securities Act?

No, the notes are not registered under the Securities Act, limiting their resale.

What are the risks associated with Fastly's Convertible Senior Notes?

Risks include potential dilution of existing shares and limited liquidity for investors.