The Company plans to use $100 million of the net proceeds from the offering to concurrently repurchase its own outstanding ordinary shares. The remainder of the net proceeds of the offering will be used for general corporate purposes, including working capital needs and potential acquisition of complementary businesses.
Not sure I fully understand why SINA needs to issue debt here. Is it simply SINA being opportunistic and taking advantage of the low the interest rates in the market? SINA has $1.24 BILLION in CASH sitting on the sidelines right now and almost no debt. I must be missing something here.
This $100 million does seem to be a toke amount in light of the market cap. On the other side, the $500 million is also small, and the company debt is minimal or nonexistent, to the best of my knowledge. The news does not seem likely to move the stock significantly.
This is actually good. They have almost no long term debt currently. They will use the $500 million to make acquisitions and the return on capital will far exceed the amount of interest. Especially when the interest rates are so low. The share buy back, assuming they use all of the $100 million, is about 2% of float. Not a significant percentage, but helps the bottom line.