Shares of DraftKings Inc. DKNG,
took a 3.6% hit in premarket trading on Monday after the digital sports gaming company announced plans to offer $ 1 billion in convertible debt. The private offer will be made to qualified institutional investors. DraftKings plans to use the proceeds from the offering for working capital and general corporate purposes, including acquisitions and technology investments. The debt is senior unsecured bonds and can be converted into cash, Class A shares, or a combination of both at the company’s option. The interest rate of the debt and the conversion rate have not yet been determined. DraftKings’ stock is up 42.1% in the last three months through Friday, while the S&P 500 SPX,
is stuck at 6.7%.