New York, February 9, 2026, 15:14 (EST) — Regular session.
- Microchip Technology shares slipped roughly 2% following news of a $600 million convertible notes offering from the company.
- Funds are marked for capped-call hedge transactions, plus paying down commercial paper borrowings.
- Traders keep an eye on note pricing terms and hedging flows—factors that can jolt the stock.
Microchip Technology Incorporated’s stock dropped roughly 2% to $74.52 Monday afternoon, following news of its $600 million convertible senior note offering. Earlier, shares had tumbled as much as 7.7% during the session.
The deal’s significance is clear: convertibles, which start as debt but may become equity, tend to trigger short-term selling as investors set up hedges. Shareholders, for their part, have to factor in the potential for dilution ahead.
Microchip said its notes will mature in 2030, with the sale targeting qualified institutional buyers in a private placement. Initial purchasers can pick up as much as $90 million extra over the next 13 days. Part of the proceeds are earmarked for capped-call transactions—an options hedge to limit dilution—while the remainder will go toward repaying outstanding commercial paper notes. The company added that J. Wood Capital Advisors LLC, advising Microchip on the deal, plans to buy up to $25 million in shares alongside the offering. Hedge activity around the capped calls could affect stock movement near pricing, Microchip warned. 1
Chip names split direction. Texas Instruments slipped close to 1%. Analog Devices gained around 0.8%, and ON Semiconductor inched up.
Microchip turned in December-quarter net sales of $1.186 billion, with non-GAAP earnings hitting 44 cents per share last week. “Exceeded our expectations,” CEO Steve Sanghi said. Over on the balance sheet, CFO Eric Bjornholt noted net debt came down by $26 million and added that the focus on trimming debt continues. Looking ahead, Microchip is projecting March-quarter net sales between $1.24 billion and $1.28 billion, with non-GAAP EPS ranging from 48 to 52 cents. The board also approved a quarterly dividend of 45.5 cents per share, set for payment on March 10 to shareholders of record as of Feb. 23. 2
Selling the planned notes would extend some of the company’s funding along the curve. Commercial paper, known for short maturities and constant rollovers, keeps refinancing needs high. Longer-dated notes help smooth out those bumps, though the convertible structure adds another twist to the equity narrative.
The offering still lacks a price tag. Investors are waiting to see the interest rate and conversion details—those numbers will spell out both the true cost of this debt and the dilution risk. Until pricing lands, hedging activity keeps the shares twitchy.
Now, eyes are on how the notes get priced — particularly the conversion rate — and if buyers choose to snap up that extra $90 million option. It’s a short-term swing factor that could shape where MCHP heads in the next session.
