Hims & Hers Health (NYSE:HIMS) saw its shares slip about 7% on Monday after the telehealth company unveiled plans to sell $300 million of convertible senior notes that mature in 2032. The offering is being targeted to qualified institutional buyers.
Company management said the net proceeds will be used to preserve financial flexibility tied to an international expansion strategy and to support operational investments. That expansion plan explicitly includes the proposed acquisition of Eucalyptus, which Hims & Hers said it expects to close in mid-2026. The company also identified technology and fulfillment infrastructure as areas for investment, noting those deployments are intended to deliver cost efficiencies and to scale artificial intelligence capabilities.
Terms of the notes
The securities will be senior, unsecured obligations of Hims & Hers that accrue interest payable semi-annually and carry a final maturity date of June 1, 2032. Noteholders will have the right to convert the notes under specified conditions. If conversions occur, Hims & Hers may settle those conversions in cash, by issuing shares of its Class A common stock, or by using a combination of cash and shares.
The company provided initial purchasers with an option to acquire up to an additional $45 million of notes within 13 days after issuance. It also indicated that a portion of the offering proceeds will be applied to capped call transactions intended to reduce potential dilution to Class A common stock if conversions take place.
Redemption and repurchase features
The notes will become redeemable at Hims & Hers' option beginning June 6, 2029, subject to a condition that the Class A common stock price remains above 130% of the conversion price for a defined measurement period. Additionally, holders will have the right to require the company to repurchase the notes for cash if certain fundamental change events occur.
Investors and market participants will be watching execution of the offering and the company’s use of proceeds against its stated objectives of funding international expansion, completing the proposed acquisition expected in mid-2026, and advancing technology and fulfillment investments.