Nebius Group N.V. (NASDAQ:NBIS) shares are trading higher on Monday after the company announced it entered into a $700 million private placement financing agreement. Here's what you need to know.

What To Know: The private placement aims to advance the company's previously outlined plans to expand its comprehensive AI infrastructure, featuring large-scale GPU clusters, cloud platforms and developer-focused tools and services.

"The foundation of our business is our expertise in building advanced technology infrastructure. We have demonstrated the scale of our ambitions, initiating an AI infrastructure build-out across two continents. This strategic financing gives us additional firepower to do it faster and on a larger scale. I'm grateful to our investors for the trust they have placed in us – our team is ready to deliver," said Arkady Volozh, CEO of Nebius.

Under the agreement, the company will issue 33,333,334 Class A shares at $21 each, reflecting a 3% premium over the volume-weighted average price of these shares since trading resumed on Nasdaq. The shares will be purchased by a select group of institutional and accredited investors, including Accel, NVIDIA and certain accounts managed by Orbis Investments.

What Else: In August, the shareholders approved a general authorization for the company to repurchase up to $81 million worth of Class A shares. However, the board has determined that the repurchase is no longer necessary.

"The authorization to potentially repurchase shares was originally intended to provide legacy shareholders who wanted to exit our new business an opportunity to do so, especially in light of the prolonged suspension of trading on Nasdaq. Based on the strong level of investor engagement and technical dynamics which we have observed following the resumption of trading on Nasdaq, we believe that those shareholders who may have wanted to exit have had an opportunity to do so at a price higher than the maximum repurchase price authorized by shareholders," said John Boynton, Chairman of the Board of Nebius.

"The Board has determined that the best way to maximize value for the Company's shareholders is to invest our capital into our core AI infrastructure business, where the Company believes there is a substantial market opportunity."

Due to these decisions, the company has refined its guidance and now expects to achieve an annual recurring revenue (ARR) of $750 million to $1 billion by the end of 2025.

NBIS Price Action: At the time of writing, Nebius shares are trading 16.4% higher at $25.71, according to data from Benzinga Pro.

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