YY Stock Dips on a Proposed $850 Million in Convertible Notes to Fund Expansion

YY dropped 1 percent aftermarket on news the company will issue $850 million in convertible notes to boost its video-based global expansion.

Author: Belinda Zhou   

Shares in YY Inc. (Nasdaq: YY) declined 1 percent aftermarket Tuesday after its offering of $850 million convertible debt.

The Chinese social media platform, which focuses on live-streaming, will offer $425 million in convertible senior notes due 2025 and another $425 million in convertible senior notes due 2026, respectively.

Initial purchasers will be granted with a 13-day option to buy up to an additional $75 million of each series of notes.

The proceeds will be used for related capped call transactions and for global development, video-based content offering, technology and other general purposes.

YY Inc. is targeting overseas markets to become a global social media platform, focusing on technology.

"Going forward with the global strategy and focus on AI technology, we are confident in our ability to bring YY Group into a new stage and solicited by our position at the global video based social media platform,"  said Xueling Li, co-Founder of YY Inc. last month. Mr Li has been the company's chief executive officer since April 2019.

In its latest financial reporting, net income of YY tripled to $460.4 million, or $6.57 per American depositary share in the three months through March. Net income is up 224 percent from the corresponding period of 2018.

The stock in YY jumped 3 percent to $77.18 per American depositary share at the end of trading on Tuesday.