Snap co-founder and CEO Evan Spiegel speaking at the 2018 Code Conference on May 29th, 2018.
Asa Mathat | Vox Media
Snap said Tuesday it’s going to raise $1 billion in debt. Shares of Snap were down as much as 2.1% in premarket trading.
The company, which is the maker of Snapchat, said it is offering $1 billion in convertible senior notes, due on August 1, 2026.
Snap said it will use the proceeds to cover operating expenses associated with running the business. It said the proceeds could also be used to “acquire complementary businesses, products, services, or technologies or for repurchases of Snap’s common stock.”
Last October, Snap CEO Evan Spiegel detailed the company’s goals to achieve profitability this year in a memo sent to employees. Spiegel said it was a “stretch goal” to break even in the fourth quarter of 2018 and become profitable in 2019. Cheddar first reported the contents of the memo.
The move comes as Snap recently reported second-quarter results that soared past analysts’ estimates. The company posted a narrower-than-expected loss for the quarter and reported its second consecutive quarter of user growth.
