Twitter markets $1.5 Billion in debt offerings to improve the company's further expansion.
The San Francisco-based blogging company is planning to market convertible bonds in two $650 million parts, one maturing in five years and the other in seven years, according to a regulatory filing Sept. 11.
Twitter Executives reportedly see offering debts as a strategic move since it is less expensive to do and would not diminish their ownership of the company. Twitter is not expected to be profitable this year
Twitter has been working on investing to push the company's advertising strategy and to add workforce, particularly engineers who can improve the product and capture the market..
Mike Gupta, Twiitter's former chief financial officer was replaced by Anthony Noto, a former Goldman Sachs Group Inc banker who aided the company in its debt offerings.
The report noted that two months after assigning Noto in the position, the social media blogging company formally decided to open to the concept of debt offering.
Robert Peck, a financial analyst at SunTrust Robinson Humphrey stated that Noto is reportedly fit for the job. According to Peck, Noto knows when to handle investments and purchases.
Regarding the company's purchases, Twitter has acquired $1.82 billion in its initial public offering. It has bought several companies including social-data provider Gnip INc. for $134.1 million in May. It also bought Cardspringh Inc., a service that allows developers to link digital applications to credit or debit cards.
According to the report, debt offerings have a tendency to lower down the price of shares since buyers tend to buy small stocks than big ones.
After the debt offering, Twitter shares have doubled since their initial public offering. However, the total amount declined 1.5 percent after the debt offering was announced.
Other companies that went into the debt market include Google, which sold bonds in Feb, while Netflix, a video-streaming service sold $400 million bonds to aid in the company's spending.
