GRPN
Groupon, INC
NASDAQ
8-K: Groupon Issues $197.26 Million in Convertible Senior Secured Notes
Sentiment:
Debt Issuance Announcement
19 November 2024 4:10 PM
Groupon has issued $197.26 million in 6.25% Convertible Senior Secured Notes due 2027, primarily through an exchange of existing 2026 notes and a cash subscription.
Capital raise
The document details a capital raise of $20 million through the issuance of convertible senior secured notes.
The total issuance was $197.26 million, with the majority being an exchange of existing debt.
Summary
- Groupon issued $197.26 million of 6.25% Convertible Senior Secured Notes due 2027.
- The issuance included $176.26 million in exchange for outstanding 2026 notes and $21 million for cash proceeds of $20 million.
- The notes are senior secured obligations, maturing on March 15, 2027, with interest payable semi-annually.
- The initial conversion rate is 33.333 shares per $1,000 principal amount, equivalent to a conversion price of approximately $30 per share.
- Holders have the right to require repurchase at 100% of principal plus accrued interest upon a fundamental change.
- An additional 2.5% interest will accrue if certain conditions related to SumUp equity are not met by November 20, 2025.
- Conversion is restricted until December 15, 2026, based on stock price or trading price conditions, or upon certain corporate events.
- After December 15, 2026, holders may convert regardless of prior conditions.
- The notes are guaranteed by certain domestic subsidiaries and secured by a first-priority lien on substantially all assets.
- The indenture includes covenants restricting additional debt, dividends, stock repurchases, and certain investments.
Sentiment
Score: 6
Explanation: The document is neutral in tone, focusing on the terms of the debt issuance. It is a standard financial transaction with both positive and negative implications for the company.
Positives
- The new notes provide Groupon with additional capital.
- The exchange of existing notes reduces near-term debt obligations.
- The notes are secured, potentially offering greater protection to investors.
- The conversion feature provides potential upside for investors if the stock price increases.
Negatives
- The notes carry a 6.25% interest rate, which is a cost to the company.
- The conversion feature could dilute existing shareholders if exercised.
- The indenture includes restrictive covenants that could limit the company's flexibility.
- Failure to meet conditions related to SumUp equity by November 20, 2025, will result in additional interest expense.
Risks
- The company may not be able to meet the conditions related to SumUp equity by November 20, 2025, resulting in additional interest expense.
- The conversion of the notes could dilute existing shareholders.
- The restrictive covenants in the indenture could limit the company's financial flexibility.
- The company's ability to repay the notes depends on its future financial performance.
Future Outlook
The document outlines the terms of the notes and the conditions for conversion and repurchase, but does not provide specific forward-looking statements about the company's future performance or guidance.
Industry Context
The issuance of convertible debt is a common financing strategy for companies, particularly those seeking to raise capital while offering potential upside to investors through the conversion feature. The secured nature of the notes reflects a desire to provide additional security to investors.
Comparison to Industry Standards
- The 6.25% interest rate is within the typical range for convertible debt, but the specific terms of the conversion and security provisions are unique to this offering.
- The use of a first-priority lien on substantially all assets is a common practice in secured debt financings.
- The conversion price of approximately $30 per share is a premium to the current stock price, reflecting the potential upside for investors.
- The inclusion of a make-whole provision upon a fundamental change is a standard feature in convertible debt offerings.
Stakeholder Impact
- Shareholders may experience dilution if the notes are converted.
- Creditors are provided with a secured claim on the company's assets.
- Employees may be affected by any changes in the company's financial position.
- Customers and suppliers may be indirectly affected by the company's financial decisions.
Next Steps
- The company needs to meet the conditions related to SumUp equity by November 20, 2025, to avoid additional interest.
- The company will need to manage the conversion of the notes and potential dilution of existing shareholders.
- The company will need to comply with the restrictive covenants in the indenture.
Key Dates
- November 19, 2024: Date of issuance of the 2027 Notes and the Indenture.
- March 15, 2025: First interest payment date for the 2027 Notes.
- November 20, 2025: Deadline for meeting conditions related to SumUp equity to avoid additional interest.
- December 15, 2026: Date after which the 2027 Notes become freely convertible.
- March 15, 2027: Maturity date of the 2027 Notes.
Keywords
convertible notes, senior secured notes, debt financing, convertible debt, capital raise, financial instruments, secured obligations, indenture, SumUp, convertible securities
GRPN
Groupon, INC
NASDAQ
Sector: Communication Services
Filings with Classifications
Capital raise
18 June 2025 7:29 AM
Financing Transaction Announcement
- The company is issuing $244,071,000 aggregate principal amount of new 4.875% Convertible Senior Notes due 2030 in exchange for existing notes. While it's an exchange and not a cash raise, it is a form of capital restructuring that impacts the company's debt capital.
Delay expected
17 June 2025 3:40 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
16 June 2025 3:48 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an "inadvertent administrative oversight."
Delay expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 filing itself was delayed, submitted late due to an inadvertent administrative oversight.
Worse than expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 was filed late, indicating a lapse in regulatory compliance due to an inadvertent administrative oversight.
Delay expected
4 June 2025 5:36 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight, as stated in the filing.
Better than expected
27 May 2025 1:31 PM
Insider Transaction Report Amendment
- The vesting of 109,250 Performance Share Units indicates that Groupon successfully met a pre-established stock price hurdle, which is a positive performance indicator for the company's stock.
Worse than expected
7 May 2025 4:11 PM
Earnings Press Release
- Global revenue decreased by 5% year-over-year, indicating a decline in overall sales performance.
- Adjusted EBITDA decreased from $19.5 million to $15.3 million, suggesting a decrease in profitability.
Worse than expected
7 May 2025 4:11 PM
Quarterly Report
- Revenue decreased from $123.08 million to $117.19 million, indicating a worse than expected performance.
- Adjusted EBITDA decreased from $19.52 million to $15.33 million, indicating a worse than expected performance.
Worse than expected
28 April 2025 4:07 PM
Proxy Statement
- The company reported a net loss of $57 million in 2024.
- The adjusted EBITDA goal for the 2024 Annual Bonus Plan remained below threshold.
Worse than expected
11 March 2025 4:13 PM
Earnings Release
- While North America Local billings showed positive growth, overall revenue, gross billings, and unit sales decreased year-over-year, and the company reported a net loss for both the quarter and the full year.
Worse than expected
11 March 2025 4:12 PM
Annual Results
- Gross billings, units, revenue, and gross profit all decreased year-over-year, indicating a decline in overall business activity.
Capital raise
19 November 2024 4:10 PM
Debt Issuance Announcement
- The document details a capital raise of $20 million through the issuance of convertible senior secured notes.
- The total issuance was $197.26 million, with the majority being an exchange of existing debt.
Capital raise
12 November 2024 4:51 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The company entered into exchange and subscription agreements for $197.3 million of new convertible senior secured notes due 2027.
Worse than expected
12 November 2024 4:51 PM
Quarterly Report
- The company's revenue, gross profit, and adjusted EBITDA all decreased compared to the same period last year, indicating worse than expected results.
Delay expected
12 November 2024 4:51 PM
SEC Form 4 Filing
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Capital raise
12 November 2024 4:50 PM
Financing Announcement
- Groupon is raising $20 million in gross cash proceeds through the issuance of new 2027 convertible secured notes.
- The company is also exchanging $176.26 million of existing 2026 notes for new 2027 notes, which is a form of capital restructuring.
Better than expected
30 July 2024 4:19 PM
Quarterly Report
- The company reported a smaller net loss compared to the same quarter last year.
- The company achieved positive operating and free cash flow.
- North America local revenue grew by 7% year-over-year.
Worse than expected
30 July 2024 4:18 PM
Quarterly Report
- The company's revenue decreased slightly year-over-year, indicating a worse performance than expected in terms of top-line growth.
Better than expected
9 May 2024 4:09 PM
Quarterly Report
- The company's results were better than expected as they exceeded the high end of guidance.
- The company achieved its first consolidated revenue growth since 2016.
- Adjusted EBITDA turned positive, a significant improvement from the previous year.
Worse than expected
9 May 2024 4:06 PM
Quarterly Report
- While the net loss improved, the company still reported a loss and gross billings decreased, indicating worse than expected performance.
Capital raise
9 May 2024 4:06 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The rights offering was fully backstopped by Pale Fire Capital SICAV a.s.
Capital raise
7 May 2024 9:26 AM
Executive Appointment and Compensation Announcement
- The company is seeking stockholder approval to increase the number of shares available under the 2011 Incentive Plan by 7,000,000 shares.
- This increase is necessary to cover the PSU awards granted to the CEO and CFO, as well as future awards to other employees.
Capital raise
29 April 2024 5:25 PM
Proxy Statement
- The Pale Fire Parties amended and restated the Standstill Agreement to (a) modify the termination date from the earlier to occur of forty-five days following the date on which Mr.
- Senkypl shall cease to serve for any reason as Interim Chief Executive Officer or Chief Executive Officer of the Company to December 31, 2024; and (b) exclude any and all shares of common stock purchased by the Pale Fire Parties in connection with (i) their exercise of basic subscription rights prior to the expiration of the Rights Offering, (ii) fully purchasing any and all unsubscribed shares in the Rights Offering following its expiration, and (iii) the exercise of their over-subscription privileges, if applicable, from the Pale Fire Parties existing 25% beneficial ownership limitation.
Better than expected
15 March 2024 7:05 AM
Quarterly Report
- The company's Q4 results were better than expected, with positive net income and adjusted EBITDA, which is a significant improvement from previous quarters.
- The company also resolved its going concern issue, which was a major concern in previous periods.
Capital raise
15 March 2024 7:05 AM
Quarterly Report
- In January 2024, Groupon closed a fully backstopped Rights Offering that was oversubscribed and raised $80.0 million.
Worse than expected
15 March 2024 6:58 AM
Annual Results
- The document outlines numerous risks and challenges, suggesting that the company's future performance may be worse than expected.
Capital raise
14 February 2024 7:29 PM
Debt Repayment Announcement
- Groupon conducted an $80 million fully backstopped rights offering.
- The rights offering was made available to all holders of record of the company's common stock.
- The proceeds from the rights offering were used to repay debt and for general corporate purposes.
Capital raise
22 January 2024 8:30 AM
Capital Raise Announcement
- Groupon completed an $80 million rights offering.
- The offering was fully backstopped and significantly oversubscribed.
- The company issued 7,079,646 shares at $11.30 per share.
Better than expected
12 January 2024 8:41 AM
Business Update
- The company expects Q4 2023 results to be at or above the high end of guidance, indicating better than expected performance.
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