Key points
- Nebius (NBIS) plans to offer $4.5 billion in convertible senior notes, split $2.75 billion due 2030 and $1.75 billion due 2034.
- NBIS shares were down about 9% to around $227 as of midday Wednesday, off June's 52-week high of $299.86.
- Nebius is also negotiating exchanges with holders of its existing 2029 and 2031 convertible notes for new shares.
On Wednesday, August 19, Nebius Group (NBIS) announced it plans to offer $4.5 billion in convertible senior notes to institutional buyers, split between $2.75 billion due 2030 and $1.75 billion due 2034, with proceeds earmarked for data center construction and GPU purchases. Nebius is also negotiating separate exchanges with holders of its existing 2029 and 2031 convertible notes for new shares. NBIS shares were down about 9% as of midday Wednesday, since a debt and share sale this large adds real dilution risk for existing holders.
Structured as a private placement under Rule 144A, the offering is limited to qualified institutional buyers, so the notes are unregistered and will not be available to the public. For 13 days after pricing, the initial purchasers may acquire another $375 million of the 2030 notes and $300 million of the 2034 notes. Exercising both options could raise the transaction's total value above $5.1 billion.
| Series | Amount | Matures |
|---|---|---|
| 2030 notes | $2.75B | Feb. 15, 2030 |
| 2034 notes | $1.75B | Feb. 15, 2034 |
Nebius said the proceeds will go toward continued business growth, including construction and build-out of its data centers, procurement of GPUs and other key components, and general corporate purposes. It grew second-quarter revenue 454% to $582 million and swung to a profit, a report that sent the stock up about 27% in mid-August.
Alongside the new notes, Nebius said it will negotiate privately with holders of its existing 2029 and 2031 convertible notes to exchange portions of those notes for new Class A ordinary shares, on individually negotiated terms. That would retire some old debt by issuing more stock. It adds a second layer of dilution on top of whatever conversion feature the new notes already carry. Neither the 2030 notes nor the 2034 notes can be redeemed before February 2028, except in specific tax situations. The interest rate and conversion price on both series were not disclosed. Nebius said those terms will be set when the offering prices.
NBIS opened at $232.21 Wednesday and fell as low as $213.75. It was trading around $227 as of midday Wednesday, down about 9% from Tuesday's $248.43 close. That is still above the $211.77 level where investor Michael Burry opened a short position on Nebius in early August, arguing that AI-era earnings across the sector are inflated by understated chip depreciation. Nebius shares have more than tripled off their 52-week low of $62.01, set almost exactly a year ago, and remain about 25% below the 52-week high of $299.86 hit in June.
Convertible notes let a capital-heavy company borrow more cheaply than a straight bond, since investors accept a lower interest rate for the option to convert into stock later. The tradeoff is dilution. If the stock rises past the conversion price, Nebius effectively sells shares below whatever they are worth by then, and the announcement itself often pressures a stock as arbitrage funds short shares to hedge the notes they plan to buy. Nebius already took $775 million in secured debt in mid-July to fund the same data center buildout. This offering is a much larger, and more dilutive, route to the same goal.
This is general market commentary and not investment advice. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.
