Momo Offers $650 Million Convertible Notes, Shares Drop 6%

Scott Harvey 27th June 2018 0 Comments

Momo’s share price has taken a hit after it said it would offer $650 million in convertible notes, set to mature in 2025.

The convertible notes are reportedly being offered to help cover the costs of the Tantan acquisition from earlier this year.

Notes will be changed to Momo ADS Shares on July 1st, 2025, though the final conversion rate has not yet been announced.

Early investors will have the ability to purchase a further $100 million in notes up to 30 days after their initial purchase, CapitalWatch reports.

Momo stock fell from $48.17 per ADS to $45.35 after the announcement.

The Chinese dating and video streaming giant has said that as well as using funds from the notes to repay loans associated with the acquisition, it will seek to invest in intellectual property protections.

Tantan was recently targeted by Match Group and Tinder in an intellectual property dispute.

Match Group won the case, and Tantan was required to change its US interface and make royalty payments proportional to the size of their US user base.

Match Group said that the payments acted to reinforce “the strength and value of our market-leading innovations.”