Qudian to Offer $250 Million in Convertible Senior Notes; Stock Tumbles 10%

Shares in Qudian slid Wednesday after the consumer credit provider said it seeks to sell convertible senior notes with a seven-year maturation period.

Author: Belinda Zhou   

The stock in Qudian Inc. (NYSE: QD) tumbled nearly 10 percent intraday Wednesday, to $7.64 per American depositary share, after the company announced it seeks to sell $250 million in convertible senior notes.

The Xiamen, China-based provider of online small consumer credit products, said the notes will be due July 1, 2026. 

Qudian said it planned to use the proceeds from the offering to pay the cost of certain capped call transactions and general corporate purposes, including strategic investments in complementary businesses, development of the open platform, and potential share repurchases. The capped call is meant to reduce potential dilution to existing holders.

The company said buyers will have an option to purchase up to an additional $37.5 million in notes.

Last month, the lending platform reported strong financials for the first quarter amid a challenging market environment in China. 

Its revenue was $312 million, up 22 percent from the same period a year ago. Net income has nearly doubled year-over-year to $141.5 million, or 48 cents per diluted ADS. The company also reported growth in registered users and new active borrowers from the year-end.