HPE falling on $1.35B stock offering to fund Juniper deal

Hewlett Packard Enterprise (HPE) shares are falling Tuesday after it initiated sales of $1.35 billion in convertible preferred stock to fund its purchase of Juniper Networks (JNPR), an all-cash acquisition valued at $14 billion.

Market Domination co-hosts Julie Hyman and Josh Lipton break down the story and eye moves in HPE stock.

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This post was written and updated by Luke Carberry Mogan.

Video transcript

Well, shares of Hewlett Packard Enterprise H pe taking a hit after the cloud services provider in $1.3 billion stock sale to fund its purchase of Juniper Networks.

You can see that stock off just about 7.5%.

Now, this is really to no surprise or funding this deal that they had announced here for Juniper, obviously setting sights on that company here in order to expand its business, the push further here for this company going forward.

But again, I think the question going forward is exactly surrounding the momentum may be behind H PE S business.

They had put out uh pretty solid results here most recently last week, raising their annual profit forecast, say the increased demand for A I servers.

A lot of that driven by higher enterprise spending on A I infrastructure.

So again, raising some money here for this deal, a $14 billion an all cash deal and its attempts here to try to enhance some of their A I offerings.

Yes, a sense of urgency, especially on the HP side and especially considering the valuation right now for Juniper Networks market cap sitting just shy of about $13 billion here.

So some urgency to get this deal done so that they don't face too much higher of a premium that they would need to make sure that they're able to offer to Juniper Networks for the purchase here, the stock, it's up by about 30% year to date.

So at this juncture H pe just trying to get the deal done in any kind of financial capacity and way possible here.

Uh So we'll see exactly how this comes to full fruition for the company, both of them at that.