Skip to main content

Shares of



are being pounded Wednesday, as nervous investors react to the company's trip to the money markets.

In recent trading, the business intelligence-software maker was off $1.22 a share, or nearly 8%, to $14.25, with more than 11 million shares trading hands by midday. Typical volume for the stock is about 1.8 million shares a session.

The selloff started after the company announced that it has priced an offering of $200 million in convertible senior notes.

Scroll to Continue

TheStreet Recommends

Informatica said it will use up to $50 million of the net proceeds from the offering to buy back shares, with the balance going toward general business purposes, "which may include the acquisition of businesses, products, product rights, technologies, or strategic investments."

Convertible notes, which are redeemed in the future as common stock, typically prompt some buyers to short the stock as a hedge, and that probably explains some of the downward movement.

But Nathan Schneiderman of Roth Capital Partners says that "investors are likely nervous about the risks of another acquisition." Earlier this year, the company spent $55 million to buy privately held

Similarity Systems


Schneiderman says that the company is going to the money markets at a favorable time, when rates are still low. "I think the move is sensible. The company has significant momentum right now" he said in an interview. His company does not have an investment banking relationship with Informatica.

Despite the selloff, shares of the Redwood City, Calif., company are still up about 19.5% so far this year.