Robinhood has a new convertible debt play: $2 billion at zero percent interest.

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37 segments

0:00

Robin Hood has priced $2 of 0%

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convertible senior notes due to 2029

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zero coupon debt no interest. This

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closes in 2 days on June 25th. So 290

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million of this will be used to buy back

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their own stock. The rest is for growth

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and acquisitions plus 112 million on

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capped calls. This was led by Goldman

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and JP Morgan. So you've probably heard

0:26

about convertible debt before. You've

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probably heard about prefs before. But

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this one is not preferred capital, but

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it's interesting with Alphabet following

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the strategy playbook. Now these

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convertible notes are not necessarily

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brand new, but strategy has obviously

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brought them into the mainstream and

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made them extremely popular. But what

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you have here, I mean think about this

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when we talk about zero and low interest

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rates, I mean people are so excited

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about the prospects of Robin Hood's

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price going up that they're willing to

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lend Robin Hood effectively $2

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with 0% interest. The more interesting

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part is that strategy

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who well as I said somewhat pioneered

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new wave of convertible debt, but

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something that was really championed by

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strategy and the crypto market now

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become very popular with companies like

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Alphabet and Robin Hood. Now it's going

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to be interesting to see how these all

1:17

play out if they can actually raise the

1:18

$2 seemingly that's not going to be a

1:20

problem for them and how it affects

1:23

their stock.

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Robinhood has priced $2 billion of 0% convertible senior notes due in 2029. A portion of these funds, $290 million, will be used to buy back their own stock, with the remainder allocated for growth, acquisitions, and $112 million for capped calls. Goldman and JP Morgan led this offering. Investors are willing to lend to Robinhood at 0% interest, indicating strong excitement about the prospects of Robinhood's stock price increasing. This strategy, pioneered by "strategy" in the crypto market, is becoming popular with major companies like Alphabet and Robinhood.