SAIL - Why Sailpoint Technologies Stock Dropped 17% in September
Shares of Sailpoint Technologies (NYSE: SAIL) declined 17% in September, according to data from S&P Global Market Intelligence, after the enterprise identity-governance specialist held a potentially dilutive offering of convertible debt.
Sailpoint's drop last month began in earnest on Sept. 18, when the company initially proposed a private offering of $300 million of convertible senior notes, as well as a 13-day option for the purchasers to buy up to an additional $50 million aggregate principal of the notes. Two days later, the company chose to increase the offering to $350 million along with the same 13-day, $50 million additional option.
When all was said and done and the sale of the notes closed on Sept. 24, Sailpoint collected net proceeds of roughly $391 million from the offering -- a hefty sum considering its entire market capitalization today stands at a relatively small $1.7 billion. The company said it plans to use the cash "for general corporate purposes, including working capital, operating expenses, and capital expenditures."