Rubrik drops after $1 bln convertible debt deal announced

Shares of cybersecurity firm Rubrik RBRK.N, backed by Microsoft MSFT.O, down 4.7% premarket to $88.75 as it looks to raise capital

Palo Alto, California-based RBRK offering privately $1 bln 5-yr convertible bonds

It plans to use net proceeds to pay for capped calls, derivative transactions employed to reduce dilution, to fully repay ~$328 mln of outstanding loans under and terminate its credit agreement

Co also intends to use proceeds for potential acquisitions or strategic investments, and working capital among other purposes

With ~193.4 mln shares outstanding as of May 31, co has ~$18 bln market cap

RBRK shares on Mon fell 4.9% to close at $93.15, trimming YTD gain to 42.5% YTD

Of 22 analysts covering RBRK, recommendation breakdown is 19 "strong buy" or "buy" and 3 "hold" ratings; median PT of $110 up from $80 a month ago - LSEG latest data

Co went public in Apr 2024 after IPO priced at $32