Opendoor Technologies Inc. (Nasdaq: OPEN) (“Opendoor”), a leading
digital platform for residential real estate, today announced its
intention to offer, subject to market and other conditions,
$750,000,000 aggregate principal amount of convertible senior notes
due 2026 (the “notes”) in a private offering to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). Opendoor also expects
to grant the initial purchasers of the notes an option to purchase,
for settlement within a period of 13 days from, and including, the
date when the notes are first issued, up to an additional
$112,500,000 principal amount of notes.
The notes will be senior, unsecured obligations
of Opendoor, will accrue interest payable semi-annually in arrears
and will mature on August 15, 2026, unless earlier repurchased,
redeemed or converted. Noteholders will have the right to convert
their notes in certain circumstances and during specified periods.
Opendoor will settle conversions by paying cash up to the aggregate
principal amount of the notes to be converted and paying or
delivering, as applicable, cash, shares of its common stock or a
combination of cash and shares of its common stock, at its
election, in respect of the remainder, if any, of its conversion
obligation in excess of the aggregate principal amount of the notes
being converted based on the applicable conversion rate(s). The
notes will be redeemable, in whole or in part (subject to certain
limitations), for cash at Opendoor’s option at any time, and from
time to time, on a redemption date on or after August 20, 2024 and
before the 36th scheduled trading day immediately before the
maturity date, but only if the last reported sale price per share
of Opendoor’s common stock exceeds 130% of the conversion price for
a specified period of time and certain liquidity conditions have
been satisfied. The redemption price will be equal to the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date. The
interest rate, initial conversion rate and other terms of the notes
will be determined at the pricing of the offering.
Opendoor intends to use a portion of the net
proceeds from the offering to fund the cost of entering into the
capped call transactions described below. Opendoor intends to use
the remainder of the net proceeds from the offering for general
corporate purposes. If the initial purchasers exercise their option
to purchase additional notes, then Opendoor intends to use a
portion of the additional net proceeds to fund the cost of entering
into additional capped call transactions as described below.
In connection with the pricing of the notes,
Opendoor expects to enter into privately negotiated capped call
transactions with one or more of the initial purchasers or their
affiliates and/or other financial institutions (the “option
counterparties”). The capped call transactions are expected to
cover, subject to anti-dilution adjustments substantially similar
to those applicable to the notes, the number of shares of
Opendoor’s common stock that will initially underlie the notes. If
the initial purchasers exercise their option to purchase additional
notes, Opendoor expects to enter into additional capped call
transactions with the option counterparties.
The capped call transactions are expected
generally to reduce the potential dilution to Opendoor’s common
stock upon any conversion of the notes and/or offset any potential
cash payments Opendoor is required to make in excess of the
principal amount of converted notes, as the case may be, upon
conversion of the notes. If, however, the market price per share of
Opendoor’s common stock, as measured under the terms of the capped
call transactions, exceeds the cap price of the capped call
transactions, there would nevertheless be dilution and/or there
would not be an offset of such potential cash payments, in each
case, to the extent that such market price exceeds the cap price of
the capped call transactions.
In connection with establishing their initial
hedges of the capped call transactions, the option counterparties
or their respective affiliates expect to enter into various
derivative transactions with respect to Opendoor’s common stock
and/or purchase shares of Opendoor’s common stock concurrently with
or shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Opendoor’s common stock or the notes at that time.
In addition, the option counterparties or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Opendoor’s
common stock and/or purchasing or selling Opendoor’s common stock
or selling Opendoor’s common stock or other securities in secondary
market transactions following the pricing of the notes and prior to
the maturity of the notes (and are likely to do so following any
conversion of the notes, any repurchase of the notes by Opendoor on
any fundamental change repurchase date, any redemption date or any
other date on which the notes are retired by Opendoor, in each
case, if Opendoor exercises its option to terminate the relevant
portion of the capped call transactions). This activity could also
cause or avoid an increase or decrease in the market price of
Opendoor’s common stock or the notes, which could affect the
ability to convert the notes, and, to the extent the activity
occurs during any observation period related to a conversion of
notes, it could affect the number of shares and value of the
consideration that noteholders will receive upon conversion of the
notes.
The offer and sale of the notes and any shares
of common stock issuable upon conversion of the notes have not
been, and will not be, registered under the Securities Act or any
other securities laws, and the notes and any such shares cannot be
offered or sold except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and any other applicable securities laws. This press
release does not constitute an offer to sell, or the solicitation
of an offer to buy, the notes or any shares of common stock
issuable upon conversion of the notes, nor will there be any sale
of the notes or any such shares, in any state or other jurisdiction
in which such offer, sale or solicitation would be unlawful.
About Opendoor
Opendoor’s mission is to empower everyone with
the freedom to move. Since 2014, Opendoor has provided people
across the U.S. with a radically simple way to buy, sell or
trade-in a home online. Opendoor currently operates in a growing
number of markets across the U.S.
Forward-Looking Statements
This press release includes forward-looking
statements, including statements regarding the anticipated terms of
the notes being offered, the completion, timing and size of the
proposed offering, and the intended use of the proceeds and the
anticipated terms of, and the effects of entering into, the capped
call transactions described above. Forward-looking statements
represent Opendoor’s current expectations regarding future events
and are subject to known and unknown risks and uncertainties that
could cause actual results to differ materially from those implied
by the forward-looking statements. Among those risks and
uncertainties are market conditions, including market interest
rates, the trading price and volatility of Opendoor’s common stock
and risks relating to Opendoor’s business, including those
described in periodic reports that Opendoor files from time to time
with the Securities and Exchange Commission. Opendoor may not
consummate the proposed offering described in this press release
and, if the proposed offering is consummated, cannot provide any
assurances regarding the final terms of the offering or the notes
or its ability to effectively apply the net proceeds as described
above. The forward-looking statements included in this press
release speak only as of the date of this press release, and
Opendoor does not undertake to update the statements included in
this press release for subsequent developments, except as may be
required by law.
Contact Information
Investors: Elise Wang Opendoor
investors@opendoor.com
Media: Sheila Tran / Charles Stewart Opendoor
press@opendoor.com
Opendoor Technologies (NASDAQ:OPEN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Opendoor Technologies (NASDAQ:OPEN)
Historical Stock Chart
From Sep 2023 to Sep 2024