NEW YORK, July 21, 2026, 16:16 EDT —
Shares of SoundHound AI NASDAQ:SOUN gained 3.9% on Tuesday, finishing the session at $6.56. The closing price left the stock still 6.3% under the critical $7 merger benchmark.
That threshold determines how its planned acquisition of LivePerson NASDAQ:LPSN is structured. The deal sets $7 as the lowest conversion price. If the pricing average falls below this, it will not increase the number of stock-consideration shares.
A filing from July 13 provides an initial estimate of 42.63 million shares to be issued in the merger. This represents 10.1% of SoundHound’s basic weighted share count for the first quarter.
The majority would be allocated to creditors rather than ordinary shareholders. According to the filing, secured-note holders are assigned 37.32 million shares, equivalent to 87.5%. Non-TASE holders are to get 5.09 million shares. An additional 0.23 million shares are designated for equity awards.
The filing highlights the significant impact the collar has on issuance:
| Pricing scenario | Projected shares issued | Increase in shares compared to Q1 basic count |
|---|---|---|
| $7 minimum | 43.43 million | 10.3% |
| Preliminary estimate as of July 13 | 42.63 million | 10.1% |
| $12 maximum | 25.33 million | 6.0% |
The floor and cap scenarios do not allocate cash to Tel Aviv Stock Exchange holders. All percentages are derived from SEC data that has been disclosed.
The floor case results in 18.10 million additional shares issued compared to the cap case, an increase of 71%. SoundHound has the option to lessen share issuance by using cash to pay some creditor obligations instead of offering stock.
The headline equity value reflects just a part of the deal. The initial common-share payout is $42.8 million, subject to cash adjustments. Under the terms, secured-note holders get $261.2 million.
The pricing is based on a volume-weighted average over 10 sessions, concluding three trading days prior to closing. The deal is not determined by Tuesday’s spot price. An equivalent observation window would trigger the $7 minimum.
The unaudited pro forma figures indicate the scale scenario. Revenue for the first quarter would have reached $101.2 million, marking a 2.3-fold increase over SoundHound’s revenue alone. The operating loss would remain at $22.3 million.
LivePerson CEO John Sabino said in April that “the artificial boundaries between ‘talking’ and ‘typing’ are disappearing.” The companies intend to integrate voice automation into digital messaging. SoundHound AI
Shares rose on Tuesday with 38.1 million traded, 28% higher than the 65-day average. The rally followed a 5.6% decline recorded in the week to July 17.
In the coming week, investors are expected to monitor the VWAP gap. Updates to filings may alter reported cash, debt, or award estimates. Existing numbers are still considered preliminary.
LivePerson shareholders are set to vote on August 20, marking the next fixed milestone. The deal still needs to secure regulatory clearances and finalize the notes restructuring before it can close.
Risks: Share numbers may fluctuate depending on closing VWAP, cash on hand, and awards. SoundHound has the option to use cash instead of stock. The transaction could fail to receive necessary approvals or miss its October 21 outside date, possibly pushing it back to December 5.
SoundHound would require an increase of 6.7% from Tuesday’s closing price to hit $7. Preliminary issuance remains close to its upper boundary unless the pricing average rises above that level.
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