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Vroom drops on proposed $500 Million senior note sale

Vroom drops on proposed $500 Million senior note sale
Business
Shares of Vroom (VRM) dropped after the online car dealership unveiled plans to sell $500 million of convertible senior notes due 2026 to institutional buyers.

The New York company also will give the initial purchasers an option to buy another $75 million (U.S.) of notes.

The notes are convertible or can be redeemed in full or in part for cash at Vroom’s option on or after July 6, 2024.

Vroom will use the funds for general purposes, including advertising and marketing, expansion of its logistics operations and increased resources for its customer experience team.

At last check Vroom shares were off 5.7 per cent to $42.61.

Last month, Vroom shares rose after its first-quarter report received positive reviews from analysts and prompted some price-target upgrades.

Vroom’s first-quarter net loss widened to $77.2 million, or 57 cents a share, from $41.1 million, or $4.85 a share, in the year-earlier quarter. Shares outstanding jumped to 135.5 million from 8.5 million.

The FactSet-derived analyst consensus called for a loss of 63 cents in the latest quarter.

Revenue jumped 57 per cent to $591.1 million, ahead of the FactSet consensus estimate of $517.2 million. Consumer demand for cars — and online shopping generally — has surged during the pandemic.
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