Twitter Inc (NYSE:TWTR) is moving on up after receiving a warm welcome to a major index. Its shares were headed in the same direction until the announcement of a convertible note offering.
The social media company’s shares hit a three-year high on Tuesday after the news that it will replace Monsanto Company (NYSE:MON) on the S&P 500 index as of Thursday.
READ: Twitter stock pops on news it’ll replace Monsanto in S&P 500
The agricultural chemical company is soon-to-be acquired by German pharmaceutical giant Bayer.
Netflix Inc (NASDAQ:NFLX) will take Monsanto’s place on the S&P 100.
Now that Twitter is included in the S&P 500, mutual funds and ETFs will need to buy shares of the social media giant to have proper weighting in the stock.
In spite of the promotion, shares took a nosedive after Twitter announced that it would be offering US$1bn in notes to "qualified institutional buyers" that will mature in 2024. The notes can be converted into cash, stock or a mix of both depending on the company's discretion.
Twitter will use the proceeds to pay the cost of the transactions and the rest will go towards general corporate purposes, according to its press release.
Shares of the company fell more than 1% to US$39.40 in Wednesday pre-market trading.