HPE: steep decline following convertible bond issue

(CercleFinance.com) - Hewlett Packard Enterprise posted the biggest drop in the S&P 500 index on Tuesday morning on the New York Stock Exchange after announcing a $1.
35 billion convertible bond issue.

Just under an hour after opening, the server manufacturer's stock was down more than 7%, while the S&P index was broadly stable at the same time.

The computer manufacturer, whose shares hit an all-time high this summer, announced yesterday after the close the launch of a new issue of preference shares to be converted into ordinary shares at their 2027 maturity.

In a press release, the Houston (Texas)-based group indicated that the operation was intended to finance all or part of the acquisition of Juniper Networks, a specialist in data center equipment.

As the operation will involve a total of 27 million shares, dilution is expected to be significant, which explains the sharp fall in HPE shares at the start of trading on Tuesday.

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