Detail on Square's (SQ) Two Big Announcements - Needham & Company

Needham & Company analyst, Mayank Tandon, reiterated his Buy rating on shares of Square (NYSE: SQ) after the company made two announcements 1 ) that the company entered into an agreement with Starbucks to cancel the remaining SQ warrants and 2) the company announced the offering of $350 million in convertible notes via a private placement.

Through the warrant cancelation agreement, SQ will pay Starbucks $54.8MM to cancel Starbucks’ remaining warrant to purchase up to 9,456,955 shares of Square Class A common stock. Upon payment, the warrant will be cancelled and no longer exercisable by Starbucks.

Square also announced an offering of $350MM in convertible notes via a private placement. The notes will be convertible into cash or Square Class A common stock or a combination of the two at Square’s election. The interest rate, conversion rate, and other terms are to be determined upon pricing.

No change to the price target of $20.

For an analyst ratings summary and ratings history on Square click here. For more ratings news on Square click here.

Shares of Square closed at $17.93 yesterday.

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