IREN Shares Drop 6% After $875M Convertible Note Announcement

IREN (IREN) shares fell 6% in post-market trading following its $875 million convertible debt offering announcement. The high-performance computing firm may expand the offering to $1 billion if initial purchasers exercise an additional $125 million option. Unsecured notes mature in July 2031, convertible to shares or cash under specific conditions.

Proceeds will fund general operations and capped call transactions aimed at minimizing equity dilution from potential conversions. The company may later seek shareholder approval for share repurchases to settle these instruments. This decline nearly offset gains from newly signed AI cloud contracts linked to Nvidia Blackwell GPU deployments.

Despite the pullback, IREN maintains a staggering 1,000% rally from April lows as investors continue chasing AI infrastructure plays. The capped call strategy reflects management's anticipation of further share price appreciation while protecting against excessive dilution.