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  "documentTitle": "Box, Inc. (BOX)",
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  "authorName": "Starboard Value",
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  "presentationDate": "2021-08-06 00:00:00",
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  "notes": "Uses a waterfall chart to illustrate the erosion of gross proceeds by issuance and capped call costs.",
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      "text": "Management and the Board destroyed ~$0.23 / share of shareholder value",
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      "kind": "chart",
      "text": "Costs Associated With Convertible Debt Offering",
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      "text": "It appears that Box felt comfortable raising $345 million of unnecessary capital because it carried a 0% coupon rate.\nHowever, that overly simple way of thinking ignores the other costs borne by common stockholders:\n- $9mm issuance costs paid to Morgan Stanley;\n- $28mm in capped calls;\n- In total, Box immediately burned approximately $36 million out of the total gross proceeds of $345 million on transaction-related costs.\nThis line of thinking also ignores the fact that Box has now created a $345 million repayment obligation in downside, or even modest upside, scenarios.",
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      "text": "net proceeds: $309",
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      "text": "Box already had significant net cash and was expecting substantial future free cash flow generation.",
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      "kind": "quote",
      "text": "So going back to the convertible debt offering, we executed that as we saw it in a very opportunistic time to bolster our balance sheet through that offering, given the market environment and terms. So we're able to achieve a combination of a 0% coupon rate with no covenants. It's a flexible way to fund our future needs at a relatively low cost...the overall orientation is around going after the market opportunity and delivering shareholder value.",
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      "text": "So going back to the convertible debt offering, we executed that as we saw it in a very opportunistic time to bolster our balance sheet through that offering, given the market environment and terms. So we're able to achieve a combination of a 0% coupon rate with no covenants. It's a flexible way to fund our future needs at a relatively low cost...the overall orientation is around going after the market opportunity and delivering shareholder value. — CFO Dylan Smith, March 2021",
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      "kind": "title",
      "text": "The convertible debt raise was unnecessary",
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      "text": "Box Did Not Need to Raise Money",
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