U.S. markets open in 6 hours 2 minutes
  • S&P Futures

    +44.75 (+1.17%)
  • Dow Futures

    +342.00 (+1.11%)
  • Nasdaq Futures

    +198.25 (+1.54%)
  • Russell 2000 Futures

    +49.20 (+2.24%)
  • Crude Oil

    +1.06 (+1.72%)
  • Gold

    +22.60 (+1.31%)
  • Silver

    +0.60 (+2.27%)

    -0.0018 (-0.14%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    -0.94 (-3.25%)

    +0.0031 (+0.22%)

    +0.0810 (+0.08%)

    +1,959.21 (+4.36%)
  • CMC Crypto 200

    +3.60 (+0.39%)
  • FTSE 100

    +97.21 (+1.50%)
  • Nikkei 225

    +697.49 (+2.41%)

Box (BOX) Prices $315M Senior Notes in Private Offering

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Box, Inc. BOX recently announced the pricing of $315 million principal amount of 0% convertible senior notes due 2026 in a private placement.

The sale of the notes is expected to close on Jan 14, 2021, subject to customary closing conditions.

The notes will be offered to qualified institutional buyers only and in accordance with Rule 144A under the Securities Act of 1933, as amended. The company intends to give the initial purchasers an option to buy up to an additional $30 million aggregate principal amount of notes.

The company expects the net proceeds from this offering to be $306.3 million. It also expects to use some of the proceeds to pay the cost of the capped call transactions. The remaining net proceeds will be used for working capital and general corporate purposes.

In connection with the pricing of the notes, Box plans to enter into other privately negotiated capped call transactions with initial purchasers or their affiliates and another financial institution.

Box, Inc. Price and Consensus

Box, Inc. Price and Consensus
Box, Inc. Price and Consensus

Box, Inc. price-consensus-chart | Box, Inc. Quote

Cash Position

At the end of fiscal third-quarter 2021, Box’s cash and cash equivalents totaled $275.4 million compared with $271.9 million at prior quarter-end. Non-current debt was $50 million in the fiscal third quarter.

During the last reported quarter, cash flow from operations was $45.1 million, up $36.2 million year over year, while free cash flow was $26.2 million, up $27.9 million. Its strong free cash flow generation is encouraging.

In our view, the stock offering is expected to boost financial flexibility and help the company meet financial obligations in an efficient way. Moreover, it provides ample scope to deploy capital for long-term growth opportunities and rewarding higher returns to stockholders.

Bottom Line

Box is currently enriching cloud content management and AI platforms by developing a rich technology partner ecosystem. Its platform is presently integrating with some of the biggest enterprise technology providers such as Microsoft, Apple, IBM, Google and Salesforce.

Over the past few years, the company has been making constant efforts to grow add-on products. Its increasing customer base remains a positive. Further, strong focus on advancement of the global go-to-market strategy will continue to help it in attracting customers from the global market to its platform.

Markedly, the company continues to expand international presence with more than 2,000 global employees based in the Americas, APAC and Europe. However, rising cloud competition from players like Google and Microsoft remains a concern.

Zacks Rank and Stocks to Consider

Box currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Alphabet GOOGL, Etsy, Inc. ETSY and Inuvo, Inc. INUV, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Alphabet, Etsy, and Inuvo is currently projected at 16.9%, 29.2% and 30%, respectively.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Inuvo, Inc (INUV) : Free Stock Analysis Report
Box, Inc. (BOX) : Free Stock Analysis Report
Etsy, Inc. (ETSY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research