Veritone Offers $150M Convertible Senior Notes


Artificial intelligence tech company Veritone, Inc. (VERI) revealed its plans to offer senior convertible notes due in 2026, worth $150 million.

Following the news, shares of Veritone were down 17.4% closing at $27.74 on November 16. (See Veritone stock chart on TipRanks)

Senior Convertible Notes

Under a private offering to qualified institutional buyers, the company will also grant the initial purchasers an option to purchase additional notes worth up to $22.5 million. However, the purchasers must sell more notes than the $150 million principal amount of notes. The settlement period for the notes is 13 days.

Veritone will utilize the proceeds to finance the capped call transactions, for general corporate purposes, and acquisitions or investments.

Interest on the notes, maturing on November 15, 2026, will be payable semi-annually. The notes will not be redeemable at the company’s option prior to November 20, 2024. After that date, the company may redeem the notes for cash, subject to certain conditions.

Upon conversion, the notes may be settled in cash, shares of the company’s common stock, or a combination of cash and shares.

The company plans to enter additional capped call transactions with one or more initial purchasers, or their respective affiliates, to reduce the potential dilution to Veritone’s common stock upon any conversion of notes,

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Analysts Recommendation

Last week, JMP Securities analyst Patrick Walravens increased the price target to $49.00 (76.6% upside potential) from $45.00 and reiterated a Buy rating on the stock.

Consensus among analysts is a Strong Buy based on 3 unanimous Buys. At the time of writing, the average Veritone price target was $46.67, which implies 68.24% upside potential.

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