Why Did Solaris Energy Infrastructure Stock Dip Over 6% After-Hours?

Solaris Energy Infrastructure (SEI) stock fell 6.7% in extended trading on Monday after the company said it would offer $600 million worth of convertible bonds to raise capital.

Morgan Stanley, Goldman Sachs, and Santander U.S. Capital Markets are the book-running managers for the offering. Solaris also expects to grant the underwriters of the notes an option to buy up to an additional $90 million principal amount of notes solely to cover over-allotments.

With the proceeds of the offering, Solaris intends to spend $320.9 million on debt repayments and raise funds for the purchase of additional power generation equipment, including new natural gas turbines and complementary “balance of plant” electrical equipment, to support customer activity.

Retail sentiment on Stocktwits about Solaris was in the ‘neutral’ territory at the time of writing.

Alongside the pricing of the notes, Solaris expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their affiliates to reduce the potential dilution to Solaris’s Class A common stock upon any conversion of the notes, the company said.

“I got out of this just right on time. How lucky,” one Stocktwits user wrote.

The offering comes after the stock hit an all-time high of $47.89 during the regular trading session on Monday. While Solaris was launched in 2014 as a manager of raw materials during oil and gas well completion, the company has diversified through the purchase of Mobile Energy Rentals, a provider of mobile natural-gas-powered turbines and ancillary power equipment. This move provided the company with a pathway into distributed generation, which has seen a surge in demand due to grid congestion and the growing needs of AI data centers. 

Solaris Energy stock has gained 61.8% this year.

Also See: Why Did Trilogy Metals Stock More Than Triple After-Hours?

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