WILMINGTON, DE — InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology research and development company, announced this week that its 3.50% Senior Convertible Notes due 2024 are convertible during the calendar quarter ending March 31, 2024. This announcement signals a potentially significant development for both the company and its investors.
The current conversion rate for the notes stands at 12.9041 shares of InterDigital’s common stock per $1,000 principal amount of the notes. This means that for every $1,000 in notes, the holder can convert these into nearly 13 shares of InterDigital’s common stock.
Upon conversion, InterDigital will pay cash up to the aggregate principal amount of the notes being converted. Any conversion obligation exceeding the aggregate principal amount will be paid in cash, shares of its Common Stock, or a combination of both, at the discretion of InterDigital.
At the time InterDigital issued the notes, the company entered into call spread transactions. These financial agreements have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the notes. In essence, this increases the conversion price from the company’s economic standpoint from $77.49 to $106.35.
Investors interested in the conversion of the notes should refer to the Financial Statements from InterDigital’s Form 10-Q for the quarter ended September 30, 2023, for more information.
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