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NEWS
Venus Concept Announces $15 million Debt-to-Equity Exchange Transaction
Venus Concept Inc. (NASDAQ: VERO) has announced a $15 million debt-to-equity exchange transaction with Madryn Asset Management. This marks the second substantial reduction of existing debt by Madryn in 2024. The company exchanged $15.0 million of its senior debt for 203,583 shares of Series Y preferred stock on September 26, 2024.
Following this transaction, Venus Concept's total debt obligations decreased to approximately $34.6 million, representing a 25% reductionfrom $46.0 million as of June 30, 2024, and a 54% reduction from $74.9 million as of December 31, 2023. This move is part of the company's ongoing transformation plan to optimize its capital structure and debt profile.
Venus Concept Inc. (NASDAQ: VERO) has announced a $15 million debt-to-equity exchange transaction with Madryn Asset Management. This marks the second substantial reduction of existing debt by Madryn in 2024. The company exchanged $15.0 million of its senior debt for 203,583 shares of Series Y preferred stock on September 26, 2024.
Following this transaction, Venus Concept's total debt obligations decreased to approximately $34.6 million, representing a 25% reductionfrom $46.0 million as of June 30, 2024, and a 54% reduction from $74.9 million as of December 31, 2023. This move is part of the company's ongoing transformation plan to optimize its capital structure and debt profile.
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Chhavin : Does this means it’s going down a lot? Terms was used in the news make it seems they are using 15million over theirs equity?
Jaguar8 OP Chhavin : A debt-to-equity exchange in stocks refers to a financial transaction where a company converts its debt (such as bonds or loans) into equity, usually in the form of shares.
In simple terms, instead of paying back its debt in cash, the company issues shares of its stock to the creditors. This reduces the company's debt obligations and increases its equity (ownership). It’s often done to improve a company’s balance sheet, reduce interest payments, or avoid bankruptcy.
For creditors, this means they now hold stock in the company instead of being owed a debt, giving them a stake in the company's future performance rather than fixed payments.
And yes, a debt-to-equity exchange can result in the stock price falling. This is because it increases the number of shares outstanding, which dilutes the value of existing shares. Additionally, it might signal financial distress, leading to lower investor confidence and potentially driving the stock price down further.
Jaguar8 OP Chhavin : However, it will all boil down to general market sentiment plus shorts. Some not so good news soar and some good news plummet
Chhavin Jaguar8 OP : Another words the company didn’t make any money from production they are using stockholders money to pay for their debt. Thank you, very kind to explain that
Jaguar8 OP Chhavin : No. They are not using stockholders money to pay debt but rather issue new shares to creditors in exchange for payment of debt which consequently increases the outstanding shares. Current stockholders shares are not used but because there is increase in outstanding shares, stockholder’s shares become diluted
HannChau : but why stock price going.up, want to pump and dump?
Jaguar8 OP HannChau : It’s market sentiment.