---
title: "SentinelOne's zero-coupon raise settled at $1.44 billion, and $301 million is already gone"
description: "The Friday-night 8-K shows the option exercised in full: $1,437.5 million issued at zero interest, $301.4 million already out the door to the dilution hedge and a buyback from the note buyers, and $1.1 billion left the week Proofpoint agreed to pay $6.3 billion for Varonis."
publisher: "The Inference"
section: "Money"
published: 2026-10-17T19:14:38.410Z
modified: 2026-10-17T19:14:38.410Z
canonical: https://theinference.org/article/sentinelone-s-zero-coupon-raise-settled-at-1-44-billion-and-301-million-is-already-gone
language: en
keywords: "SentinelOne, Convertible Notes, Cybersecurity, Capital Markets, M&A"
---

# SentinelOne's zero-coupon raise settled at $1.44 billion, and $301 million is already gone

> The Friday-night 8-K shows the option exercised in full: $1,437.5 million issued at zero interest, $301.4 million already out the door to the dilution hedge and a buyback from the note buyers, and $1.1 billion left the week Proofpoint agreed to pay $6.3 billion for Varonis.

## What settled is 15% above the headline

After the close on Friday, October 16, 2026, a day [its shares fell 7.68% to $21.58](https://ca.finance.yahoo.com/news/sentinelone-registers-bigger-fall-market-210005328.html) [2], [SentinelOne](https://theinference.org/markets/companies/sentinelone), the cybersecurity software maker, [filed an 8-K](https://www.sec.gov/Archives/edgar/data/1583708/000110465926116654/0001104659-26-116654-index.htm), the SEC form for material corporate events, recording what its zero-interest borrowing produced [1]. The initial purchasers, the banks that bought the notes, exercised their $187.5 million option in full [1].

That lifted the issue to $1,437.5 million of 0.00% convertible senior notes due 2031, 15% more than [the $1.25 billion headline of October 14](https://theinference.org/article/sentinelone-s-1-25-billion-zero-coupon-raise-is-48-times-its-free-cash-flow), for net proceeds of about $1,408 million [1][4][5]. The fall was not SentinelOne's alone: [CrowdStrike](https://theinference.org/markets/companies/crowdstrike) lost 7.02%, [Palo Alto Networks](https://theinference.org/markets/companies/palo-alto-networks) 7.63% and [Fortinet](https://theinference.org/markets/companies/fortinet) 7.03% that session, [as rate worries and an exploited Palo Alto firewall flaw hit the sector](https://finance.yahoo.com/markets/stocks/articles/crowdstrike-stock-fell-7-friday-222439553.html) [3].

## A fifth of the money left before the war chest

The filing shows what the raise cost. About $151.4 million of the proceeds paid for capped call transactions, contracts that offset the share dilution if the notes convert, with protection running to a $48.02 cap price, double the $24.01 reference price; [the October 14 pricing release](https://www.businesswire.com/news/home/20261013630798/en/SentinelOne-Announces-Pricing-of-Offering-of-%241.25-Billion-of-0.00-Convertible-Senior-Notes-Due-2031) had estimated $131.6 million [1][4].

Another $150.0 million bought back about 6.2 million shares at $24.01, the October 13 close, from the note purchasers themselves, in trades the filing said were expected to settle on or about October 16, the day the stock finished 10.1% below that price [1][2]. Roughly $1,106.6 million remains for the "potential acquisitions" [the announcement named](https://ecmsource.com/sentinelone-prices-1-44b-zero-coupon-convertible-notes-2031/) [1][5].

*Chart: **A fifth of the raise never reached the war chest** Stacked bar splitting SentinelOne's $1,408 million of net proceeds into capped calls ($151.4M), a buyback from noteholders ($150.0M) and the roughly $1,106.6M left with the company*

*Net proceeds of about $1,408 million from the notes settled October 16, 2026, in millions of dollars. Source: SentinelOne Form 8-K, October 16, 2026; ECM Source. [1][5]*

## Borrowed at about 46 times free cash flow

The notes pay no regular interest and cannot be redeemed before October 9, 2029; 46,054,481 shares sit behind the $31.21 conversion price, up to 59,870,868 in limited circumstances [1]. The base beneath is thin: [filings show an estimated $31.1 million of free cash flow](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001583708) across the four quarters ended July 31, 2026, and $200.95 million of cash at quarter-end, which puts the principal at about 46 times trailing free cash flow [6].

The last reported quarter, ended July 31, 2026, [brought $291.98 million of revenue, a beat](https://www.msn.com/en-us/money/technology/sentinelone-analysts-increase-their-forecasts-after-q2-results/ar-AA2b84P5), and a cut in full-year adjusted-earnings guidance to 30 to 32 cents a share [7].

*Chart: **Revenue growth has halved in three years** Line chart showing SentinelOne's year-over-year revenue growth falling from 42.4% in the quarter ended October 31, 2023 to 20.6% in the quarter ended July 31, 2026*

*Year-over-year revenue growth by fiscal quarter; Q2 '26 is the quarter ended July 31, 2026. Source: SentinelOne quarterly figures from its SEC filings, retrieved 17 October 2026. [10]*

*Chart: **A $1.44 billion raise against an estimated $31 million of annual free cash flow** Bars comparing SentinelOne's trailing four-quarter free cash flow (an estimated $31.1M sum), cash at July 31, 2026 ($200.95M), remaining net proceeds ($1,106.6M) and notes principal ($1,437.5M)*

*All figures in millions of US dollars. Free cash flow is an estimate: the sum of the four quarters ended July 31, 2026, from SEC filings; that series carries a reporting break inside the window, so treat the sum as approximate. Cash is the July 31, 2026, balance. Proceeds and principal from the Form 8-K filed October 16, 2026. [1][5][6]*

## What $1.1 billion buys in a consolidating sector

The cash landed the week Thoma Bravo, the private-equity firm, saw its portfolio company Proofpoint [agree to pay $6.3 billion, at $49.75 a share](https://theinference.org/article/thoma-bravo-pays-6-3-billion-for-varonis-at-49-75-just-4-8-over-the-last-close), for [Varonis](https://theinference.org/markets/companies/varonis), 52% above the pre-rumor price, with JPMorgan and UBS [lining up $1.25 billion of high-yield debt to fund it](https://www.ainvest.com/news/varonis-soars-market-top-volume-spot-proofpoint-6-3b-takeover-sparks-trading-frenzy-2610/) [8]. CNBC's Halftime Report, whose "final trades" segment closes the show with stock picks, [counted SentinelOne on Friday's list](https://www.cnbc.com/video/2026/10/16/final-trades-servicenow-jpmorgan-chase-eaton-corporation-and-sentinelone.html) [9].

Watch next: the quarterly report, with consensus at $0.09 a share on $310.03 million of revenue [2]; the still-unsigned $400 million revolving credit facility [1]; and April 1, 2027, the first date special interest, extra interest owed only in defined cases, could come due [1]. The buyback was expected to settle on or about October 16 at $24.01 [1]; the market's close that day was $21.58 [2].

## Takeaway

SentinelOne's $1.44 billion zero-coupon convert settled with $301.4 million already spent on a dilution hedge and a buyback from its own noteholders, leaving $1.1 billion for acquisitions at about 46 times trailing free cash flow.

## Sources

1. [SEC EDGAR, SentinelOne, Inc. Form 8-K (Items 1.01, 2.03, 3.02, 8.01), filed 16 October 2026](https://www.sec.gov/Archives/edgar/data/1583708/000110465926116654/0001104659-26-116654-index.htm)
2. [Zacks Equity Research via Yahoo Finance Canada, "SentinelOne (S) Registers a Bigger Fall Than the Market: Important Facts to Note", 16 October 2026](https://ca.finance.yahoo.com/news/sentinelone-registers-bigger-fall-market-210005328.html)
3. [Yahoo Finance, "CrowdStrike Stock Fell 7% on Friday. Here's What Could Drive Shares Through 2026", 16 October 2026](https://finance.yahoo.com/markets/stocks/articles/crowdstrike-stock-fell-7-friday-222439553.html)
4. [Business Wire, "SentinelOne Announces Pricing of Offering of $1.25 Billion of 0.00% Convertible Senior Notes Due 2031", 14 October 2026](https://www.businesswire.com/news/home/20261013630798/en/SentinelOne-Announces-Pricing-of-Offering-of-%241.25-Billion-of-0.00-Convertible-Senior-Notes-Due-2031)
5. [ECM Source, "SentinelOne Prices $1.44B Zero-Coupon Convertible Notes (2031)", collected 17 October 2026](https://ecmsource.com/sentinelone-prices-1-44b-zero-coupon-convertible-notes-2031/)
6. [SentinelOne quarterly figures from its SEC filings (revenue, free cash flow, cash), retrieved 17 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001583708)
7. [Benzinga via MSN, "SentinelOne analysts increase their forecasts after Q2 results", 28 August 2026](https://www.msn.com/en-us/money/technology/sentinelone-analysts-increase-their-forecasts-after-q2-results/ar-AA2b84P5)
8. [AInvest, "Varonis Soars to Market's Top Volume Spot as Proofpoint's $6.3B Takeover Sparks Trading Frenzy", 17 October 2026](https://www.ainvest.com/news/varonis-soars-market-top-volume-spot-proofpoint-6-3b-takeover-sparks-trading-frenzy-2610/)
9. [CNBC, Halftime Report, "Final Trades: ServiceNow, JPMorgan Chase, Eaton Corporation and SentinelOne", 16 October 2026](https://www.cnbc.com/video/2026/10/16/final-trades-servicenow-jpmorgan-chase-eaton-corporation-and-sentinelone.html)
10. [SentinelOne, quarterly figures from its SEC filings, retrieved 17 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001583708)


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SentinelOne's zero-coupon raise settled at $1.44 billion, and $301 million is already gone — The Inference. Canonical: https://theinference.org/article/sentinelone-s-zero-coupon-raise-settled-at-1-44-billion-and-301-million-is-already-gone