Akamai Proposes $1.3B Convertible Notes Offering
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 18 2026
0mins
Source: seekingalpha
- Convertible Notes Offering: Akamai Technologies announced a proposal to offer $1.3 billion in 0% convertible senior notes due in 2030 and 2032, aimed at strengthening its capital structure and supporting rapid expansion of its Cloud Infrastructure Services business.
- Additional Purchase Option: Initial purchasers will have the option to buy an additional $200 million in convertible notes, enhancing financial flexibility and potentially benefiting the company's future capital expenditures.
- Stock Price Volatility: Following the announcement, Akamai's shares fell over 4% in extended trading, reflecting market concerns regarding the convertible notes offering, which may impact investor confidence and short-term stock performance.
- Clear Use of Proceeds: Akamai intends to use the remaining net proceeds to accelerate capital expenditures for its Cloud Infrastructure Services and repurchase common stock, demonstrating the company's confidence in future growth and commitment to enhancing shareholder value.
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Analyst Views on AKAM
Wall Street analysts forecast AKAM stock price to fall
11 Analyst Rating
6 Buy
5 Hold
0 Sell
Moderate Buy
Current: 143.130
Low
89.00
Averages
103.73
High
115.00
Current: 143.130
Low
89.00
Averages
103.73
High
115.00
About AKAM
Akamai Technologies, Inc. is a cybersecurity and cloud computing company. The Company develops and provides solutions for global enterprises to build, secure and accelerate their applications and digital experiences. Akamai Connected Cloud, the Company's platform, is comprised of an edge and cloud architecture and underlying network for cloud computing, security and content delivery services. Its cloud computing services include compute, storage, networking, database and container management services that are required to build, deploy and secure applications and workloads. Its security solutions are designed to keep infrastructure, websites, applications, application programming interfaces and users safe from a multitude of cyberattacks and online threats while improving performance. Its content delivery solutions consist of Web and mobile performance focused solutions and media delivery solutions. It also specializes in serverless WebAssembly function-as-a-service (FaaS) technology.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- IPO Market Revival: Cerebras Systems has successfully debuted, and SpaceX is poised to become the largest IPO, although with only about 100 companies going public compared to over 450 in 1999, indicating a cautious market sentiment.
- Performance Comparison: In 1999, over 450 companies went public with Akamai Technologies seeing a staggering 524% first-day gain, while Figma and Circle Internet had first-day gains of 250% and 168% respectively, but current performances are more muted, reflecting a shift in market sentiment.
- Investment Strategy Recommendation: Analysts suggest that investors utilize ETFs like the Vanguard S&P 500 ETF to mitigate emotional decision-making by consistently investing, thus avoiding impulsive actions during market fluctuations.
- Long-Term Return Potential: The Vanguard S&P 500 ETF has achieved an average annual return of approximately 15.5% over the past decade, and while it may not be as thrilling as investing in soaring AI stocks or hot IPOs, a long-term dollar-cost averaging strategy is considered a sound approach for wealth accumulation.
See More
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- IPO Market Revival: The successful debut of Cerebras Systems has generated significant buzz, while SpaceX is poised to become the largest IPO in history, indicating strong investor interest in emerging tech companies, despite overall IPO numbers being lower than in 1999.
- Investment Strategy Recommendation: Analysts recommend that investors adopt a dollar-cost averaging strategy, particularly through the Vanguard S&P 500 ETF, which helps maintain stability during market fluctuations and removes emotional decision-making.
- Poor Individual Stock Performance: According to a JP Morgan study, about two-thirds of individual stocks have underperformed the Russell 3000 index since 1980, highlighting the challenges individual stocks face in recovering during market volatility and underscoring the advantages of index funds.
- Long-Term Return Potential: The Vanguard S&P 500 ETF has achieved an average annual return of approximately 15.5% over the past decade, and while it may not be as exciting as investing in soaring AI stocks, consistent dollar-cost averaging is considered a smart move in any market environment for wealth accumulation.
See More
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- Shift in Attack Focus: Akamai's report reveals that financial services have become the primary target for cybercriminals conducting DDoS attacks, with the median duration of such attacks increasing by 738% since 2024, highlighting the security vulnerabilities introduced by digital transformation.
- Frequent API Security Incidents: The 2026 API Security Impact Study found that 96% of financial service leaders reported at least one API security incident in the past year, the highest rate among all industries, indicating severe challenges faced by the sector.
- Prevalence of Ransomware Attacks: Nearly 80% of financial institutions experienced ransomware attacks in the last two years, yet less than half have adopted advanced security technologies, suggesting a lag in protective measures that could lead to significant losses.
- Regional Attack Variations: Cyberattack methods vary significantly by region, with EMEA accounting for 62% of DDoS attacks, APAC being the most targeted for Layer 7 DDoS at 52%, and North America experiencing the highest prevalence of web attacks at 44%, reflecting the complexity of the global cybersecurity landscape.
See More
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- Convertible Notes Offering: Akamai Technologies has priced a private offering of $1.5 billion in aggregate principal amount of 0% convertible senior notes due 2030 and 2032, indicating a proactive approach to enhancing its capital structure to support future business expansion.
- Upsizing Option: The offering includes an option for initial purchasers to buy an additional $250 million of the 2030 notes and $250 million of the 2032 notes, which enhances market demand for these debt instruments and may provide the company with greater flexibility for future investment opportunities.
- Closing Timeline: The sale of the notes is expected to close on May 22, 2026, allowing the company ample time to plan the utilization of these funds effectively in upcoming projects.
- Increased Offering Size: The offering was upsized from the previously announced $1.3 billion, reflecting increased market confidence in Akamai, which could bolster the company's competitive position in the cloud computing and security sectors.
See More
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- Upsized Offering: Akamai announced a total offering of $3 billion in convertible notes due 2030 and 2032, increasing from the previously announced $2.6 billion, reflecting strong market confidence in its financing needs.
- Clear Use of Proceeds: The estimated net proceeds of approximately $2.958 billion will be allocated to accelerate capital expenditures for Cloud Infrastructure Services, aiming to rapidly expand its global footprint and enhance market competitiveness.
- Attractive Conversion Terms: The initial conversion price for the 2030 Notes is approximately $201.41 per share, representing a 42.5% premium over the closing price on the offering date, providing investors with potential capital appreciation opportunities and enhancing the notes' appeal.
- Risk Management Strategies: Akamai is concurrently engaging in convertible note hedge transactions to mitigate potential dilution upon conversion, ensuring the company maintains stable stock performance amid market fluctuations.
See More
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- Market Decline: The S&P 500 and Nasdaq 100 fell by 0.67% and 0.61%, respectively, reaching 1.5-week lows, indicating concerns over a pullback in tech stocks, particularly as the AI-driven rally loses momentum, which may affect investor confidence.
- Rising Bond Yields: The 10-year T-note yield surged to a 16-month high of 4.69%, triggering risk-off sentiment that led to increased stock liquidation, further heightening market uncertainty and potentially prompting the Fed to adopt tighter monetary policies.
- Supportive Economic Data: April pending home sales rose by 1.4% month-over-month, surpassing expectations of 1.0%, and March figures were revised up to 1.7%, demonstrating resilience in the housing market that could provide some support for stocks.
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See More
