Shares of Bloom Energy Corp (BE) tumbled 5.08% in after-hours trading on Tuesday, following the company's announcement of a significant convertible notes offering. The sharp decline suggests investors are reacting negatively to the potential implications of this financial move.

Bloom Energy revealed plans to offer $1.75 billion in convertible senior notes due 2030, with an option for initial purchasers to acquire an additional $250 million, potentially bringing the total offering to $2 billion. These notes will carry a 0% interest rate and can be settled in cash, Bloom Energy's Class A common stock, or a combination of both at the company's discretion. Part of the proceeds will be used to exchange existing convertible notes, with the remainder allocated for general corporate purposes.

The stock's decline likely reflects investor concerns about potential share dilution if the notes are converted to stock in the future. Additionally, the 0% interest rate on the notes might be viewed unfavorably by some market participants, as it could indicate the company's need to offer attractive conversion terms to secure funding. While the capital raise may strengthen Bloom Energy's financial position, the market's immediate reaction suggests apprehension about the long-term impact on shareholder value.