shares sagged Tuesday after the online provider of travel and hotel services priced a $100 million offering of notes that are convertible into the company's common stock at $40 a share.
The company will also give the initial buyer the option to later purchase another $25 million of the notes. Interest on the notes will accrue at an annual rate of 1%.
Priceline shares fell $2.56, or 7.4%, to $32.20.
If all $125 million of the notes are converted, priceline would have an additional 3.1 million shares outstanding, or about 8% more than what the company had in the second quarter. The notes are due Aug. 1, 2010.
Priceline plans to use the net proceeds of the offering for general corporate purposes, strategic purposes and working capital requirements.