What happened Shares of LivePerson (NASDAQ: LPSN) tanked by 10% today after the company announced a proposed private offering of convertible senior notes. LivePerson is looking to raise $450 million in fresh capital from qualified institutional investors, who will also have an option to purchase an additional $67.5 million in notes. So what The offering has not yet priced, so key details such as the interest rate, conversion rate, and offering price have not been determined. The deal is not open to public investors and the notes are only being offered to institutional investors. LivePerson, which provides conversational commerce technology to enterprise customers, is also entering into capped call transactions that are designed to mitigate dilution associated with potential conversions of the notes. Image source: Getty Images. The proceeds from the offering will be used to pay for the capped call transactions, with the rest of the money being used for general corporate purposes. Now what Stocks often fall on these types of deals since hedge funds often purchase the convertible notes in order to establish a convertible arbitrage position, which includes going long convertible notes while simultaneously shorting the stock. That selling pressure very likely contributed to the decline today but is not directly related to LivePerson's fundamentals. LivePerson has been an inadvertent beneficiary of the COVID-19 pandemic, as consumers have shifted to online channels for both work and commerce. LivePerson's offerings help enterprise customers engage with the higher traffic of website visitors. The company finished the fiscal third quarter with $198.7 million in cash on the balance sheet. 10 stocks we like better than LivePersonWhen 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 LivePerson 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 November 20, 2020 Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends LivePerson. The Motley Fool has a disclosure policy.Source