Affirm stock drops after BNPL company announces plans for convertible offering

Affirm Holdings Inc.
AFRM,
-5.78%
said Thursday that it intends to offer $1.25 billion in convertible notes. The company plans to use the proceeds for general corporate purposes and to help fund future growth initiatives. The notes would be due in 2026 and Affirm anticipates that it will grant initial purchasers the option to buy up to an additional $187.5 million of notes on the same terms within a 13-day period starting when the notes get first issued. Shares of Affirm are off 4.4% in premarket trading Thursday. The buy-now pay-later company’s stock has rocketed 135% over the past three months as the S&P 500
SPX,
+0.13%
has risen about 7%.