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Cheesecake Factory Shares Fall After Announcement of Stock, Debt Offerings

Shares of Cheesecake Factory Inc. slid Thursday after an announcement by the company that it will make secondary offerings of $300 million in convertible senior notes and $175 million in common stock.The Calabasas-based restaurant company’s statement indicated that proceeds from the offerings, about $457 million, will go to repurchase 150,000 shares of preferred convertible stock in order to simplify its capital structure. Any net proceeds will be used for general corporate expenses, including the repayment of debt under the company’s revolving credit line.The notes will be due in 2026 and interest will be payable semi-annually. Underwriters are expected to be granted an over-allotment of an additional $45 million of notes and an additional $26.25 million of common stock.After five straight days of gains, shares of Cheesecake Factory (CAKE) fell following the announcement on Thursday, down $4.75, or 7.71 percent, to close at $56.86 on the Nasdaq, a market that gained less than a percent.

Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert is a Los Angeles-based reporter covering retail, hospitality and philanthropy for the San Fernando Valley Business Journal. In addition to her current beat, she is particularly interested in criminal justice topics, health and science stories and investigative journalism. She received her AA in Humanities from Moorpark College in 2016, her BA in Communication from Cal Lutheran University in 2019 and followed it up with a MA in Specialized Journalism from USC in the summer of 2020. Through her work, Katherine aspires to help strengthen the fragile trust between members of the media and the public.
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