Fabrinet jumps after share-purchase warrant deal with Amazon

Shares of outsourced optical components maker Fabrinet FN.N up 8.1% to $218.23 on Thurs after inking warrant deal with Amazon.com AMZN.O

FN shares, which rose as high as $228.11 earlier in the session, on track for biggest one-day pct advance since Aug 20

Fabrinet early Thurs said it issued a warrant to an AMZN affiliate buy up to 381,922 of its shares at exercise price of $208.48. FN shares closed Weds at $201.88

Under the deal terms, the 10-yr warrant allows for vesting in multiple tranches over the term of the warrant based on payments to Fabrinet from either Amazon or its affiliates

If Fabrinet is acquired, or its commercial agreement with Amazon gets terminated by the e-commerce giant for cause, unvested portion of the warrant to vest in full

Fabrinet said warrant issuance expected to result in non-cash stock-based accounting adjustment to rev of ~$4.2 mln and negatively impact earnings by 12 cents/sh

As such, co reduced its fiscal Q3 profit outlook to $2.20-$2.28 and adj EPS of $2.43-$2.51

With move on Thurs, FN shares down ~1% YTD following nearly 16% gain in 2024