Mar. 21 at 12:04 PM
$SNAP pulled a masterclass in financing back in 2021 —
$1B raised via 0% convertible bonds due 2027. Sounds wild? Here’s the breakdown:
👉If this is helpful to you, tap @NasdaqKnight
• Snap borrowed
$1B with 0% interest — literally paid nothing to lenders.
• Investors got the option to convert bonds into Snap shares at ~
$89 — while the stock was only ~
$60.
• To protect themselves, Snap bought capped calls, limiting dilution if stock surged.
Fast forward to today:
$SNAP trades ~95% below that
$89 strike. Ouch. 😏
Lesson: When markets are handing out free money at sky-high premiums, it’s a red flag. High leverage, low interest, extreme optimism — that’s the classic recipe for caution. ⚠️
Snap’s “perfect deal” for investors? Looks like a nightmare now.
Volatility + aggressive funding = pay attention. This isn’t just a stock, it’s a market sentiment thermometer.
