What happened Shares of "experiences retailer" Groupon (NASDAQ: GRPN) closed Tuesday's trading session 8.4% lower, adding to the declines the stock took the previous day. In the end, both days' moves were driven by concerns about one thing. So what On Monday, Groupon announced it was going to issue convertible notes in a private placement so it could pay down debt that is scheduled to mature in 2022. The goal was to raise $200 million, with a buyer option to increase that sum to $230 million. Fears over the potential for shareholder dilution from the conversion of these notes into shares was likely what sent the stock price lower that day, even though the company only provided a broad outline of its intentions. Image source: Getty Images. On Tuesday, the market was likely reacting to the pricing of that transaction. The 2026 convertible notes will carry an interest rate of just 1.125%, which is pretty low, but they will convert into Groupon stock at a ratio of 14.68 shares per $1,000 of principal. That equates to a conversion price of roughly $68.12 per share, or about 40% above the current price of Groupon's stock. A bit of back-of-the-envelope math, meanwhile, shows that the conversion of these notes could add nearly 3 million shares to the company's issued and outstanding share count. Now what At the end of the fourth quarter, Groupon had roughly 39.1 million shares outstanding, which suggests a potential dilution of around 7.5%, assuming full conversion. It's totally reasonable that long-term investors would be worried about that, especially given that some view the company's business model with material skepticism. 10 stocks we like better than GrouponWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Groupon wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source