Backblaze Inc. shares slid 8.3% to $17.60 in extended trading after the cloud storage company disclosed plans to issue $150 million in convertible senior notes due 2031.
The offering, structured as a private placement to qualified institutional buyers under Rule 144A, is senior and unsecured, with the notes convertible into equity at a future date. This introduces potential dilution risk for existing shareholders.
The company also granted a 13-day over-allotment option to initial purchasers, enabling the sale of up to an additional $22.5 million in notes, bringing the total potential issuance to approximately $172.5 million.
BofA Securities is acting as the lead bookrunner for the transaction. The stock’s decline followed a two-week surge of more than 60%, during which shares rose from a 52-week low of $3.26 to a peak near $23.99.
The broader market showed little movement, with the S&P 500 essentially flat at -0.01%, the Dow Jones down 0.01%, and the Nasdaq down 0.08%. Analysts attributed the sell-off to the company-specific capital markets announcement rather than broader sector or macroeconomic factors.
