The stock of Melville-based Verint Systems Inc. fell nearly 5 percent in trading Tuesday after the software company announced it would begin a stock and convertible note offering.
Shares of Verint -- which makes corporate analytics and customer service software -- closed at $49.34, a 4.84 percent dip.
Verint said late Monday it will offer 5 million shares and $300 million in convertible notes. The notes are loans that can be converted at a later date into stock, cash or a combination of the two, the company said in a news release. Verint intends to use the proceeds from the note offering to pay off loans and cover other costs.
Stock offerings, as well as convertible notes, allow more investors to take an equity stake in the company and can dilute the value of the current stock, said Norman Young, an analyst that follows Verint at Chicago-based researcher Morningstar.
"There's a little bit of dilution there, I imagine it's going to be in the several percentage points range," he said.
Last week, Verint reported a profit for the quarter ending April 30 and increased its revenue outlook for 2014. The company's earnings were boosted by its $514 million acquisition of Sunnyvale, California-based KANA Software Inc. in January. Despite Tuesday's decline, its shares are up nearly 15 percent year to date.