W - BUY - Senior Notes Issuance & Associated Redemption (In Progress) Further Reduces Out-Year Dilution Risk—$100 Price Target

研报英文原文证据摘录

W - BUY - Senior Notes Issuance & Associated Redemption (In Progress) Further Reduces Out-Year Dilution Risk—$100 Price Target

May 19, 2026

Steven Forbes, CFA, CPA steven.forbes@guggenheimpartners.com W - BUY - Senior Notes Issuance & Associated

212 381 4188 Redemption (In Progress) Further Reduces Out-Year

John Heinbockel

john.heinbockel@guggenheimpartners.com Dilution Risk—$100 Price Target

212 381 4135

Julio Marquez Key Message: Yet again, W has issued interest-bearing senior notes to repurchase/ julio.marquez@guggenheimpartners.com redeem outstanding convertible notes—with the goal of managing (and opportunistically 212 823 6605

reducing) out-year dilution risk. To that end, W issued $400 million of 7.125% Senior

Jacob Nivasch Secured Notes due 2034 (settled May 18) and called for the redemption of all ~$444

jacob.nivasch@guggenheimpartners.com million of the outstanding 3.500% Convertible Senior Notes due 2028. Although the

212 338 8837 applicable conversion rate will increase to 23.3162 shares per $1,000 principal amount of

Max Horowitz notes (up from 21.8341 shares)—reducing the conversion price to $42.89 (from $45.80)

max.horowitz@guggenheimpartners.com —W plans to settle the principal amount of the notes in cash, implying a net issuance

212 518 9974 of ~2.6 million basic shares (based on the current share price, see Exhibit 1). That said,

since our $100 price target already incorporates the fair value of all convertible notes

outstanding (inclusive of the assumption for dilution above the principal amount of all

outstanding notes), this transaction only increases our pro-forma dilutive share count

from this tranche of notes by 650,000 shares (due to the change in the conversionW BUY price).