The stock fell to $3.35 per share as investors weighed the dilutive potential and specific terms of the new debt. The notes, scheduled to settle on Feb. 27, were met with enough demand for the company to increase the total principal amount from its original goal. Additionally, Energy Vault granted initial purchasers an option to acquire up to $20 million in additional notes, potentially further expanding the scope of the capital raise.

Strategic Debt Management

Energy Vault expects to net approximately $135.5 million from the sale after accounting for fees and expenses. Management has outlined a specific roadmap for the capital, primarily focused on cleaning up the balance sheet and managing equity exposure through structured financial instruments.

According to the company, the funds will be allocated across several key financial priorities:

• Funding the cost of capped call transactions to mitigate potential stock dilution.
• Redeeming between $35 million and $45 million in senior unsecured convertible debentures previously issued to YA II PN.
• Supporting general corporate purposes and working capital requirements.