Snap says it’s raising $1 billion in convertible debt

Snap said Tuesday it’s going to raise $1 billion in debt.

The company, which is the maker of Snapchat, said it is offering $1 billion in convertible senior notes, due on Aug. 1, 2026.

Snap said it will use the proceeds to cover operating expenses associated with running the business. It said the proceeds could also be used to “acquire complementary businesses, products, services, or technologies or for repurchases of Snap’s common stock.”

The stock price was down slightly by late morning Tuesday.

In a memo sent to employees last October, CEO Evan Spiegel detailed the company’s goals to achieve profitability this year. Spiegel said it was a “stretch goal” to break even in the fourth quarter of 2018 and become profitable in 2019. The website Cheddar first reported the contents of the memo.

Snap recently reported second-quarter results that soared past analysts’ estimates. The company posted a narrower-than-expected loss for the quarter and reported its second consecutive quarter of user growth.