Shares of Backblaze Inc. fell 6.7% in after-hours trading on Tuesday after the company announced a $150 million convertible senior notes offering due 2031.
The cloud storage provider plans to issue the notes in a private placement to qualified institutional buyers under Rule 144A. Initial purchasers will have a 13-day option to acquire up to an additional $22.5 million in notes to cover over-allotments. The interest rate, initial conversion rate, and other terms will be determined at pricing.
The notes will be senior, unsecured obligations convertible into cash, Backblaze Class A common stock, or a combination thereof, at the company’s election. Backblaze intends to use a portion of the net proceeds to pay for capped call transactions, which are designed to reduce potential dilution to Class A shareholders upon conversion. The remainder will be allocated to general corporate purposes and capital expenditures.
Backblaze, which provides object storage services for AI infrastructure and data-intensive workloads, serves over 500,000 customers across 175 countries. BofA Securities is acting as the lead bookrunner for the offering.
