Jefferies analyst Lloyd Byrne cut Sable Offshore Corp.'s price target from $24 to $11 on July 6, yet the new target still implies an upside potential of more than 180%. The analyst maintained a Buy rating despite recent challenges, including dilution from a convertible notes offering executed amid the company's failure to secure government support. On July 1, Sable Offshore disclosed a public offering of 32,467,533 common shares at $3.08 per share and $300 million principal amount of 6.5% convertible senior notes due 2031, with underwriters given a one-month option to purchase up to an additional 4,870,129 shares and $45 million in notes. The notes are senior unsecured obligations with interest payable semi-annually, and the initial conversion rate is 249.7502 shares per $1,000 face value, implying a conversion price of about $4 per share, a roughly 30% premium to the public offering price.
Sable Offshore Corp.Price target slashed from $24 to $11 and dilutive convertible notes offering executed amid failure to secure government support.
Jefferies Financial Group Inc