** Shares of software firm Cloudflare NET.N down 1.7% premarket to $167.92 after it raises capital

** San Francisco-based co early Fri announces pricing $1.75 bln 0% 5-yr convertible notes offering

** Initial conversion price of $247.67 is 45% above stock's last close. NET shares on Weds fell 5% to $170.81

** Co, which offers services to improve website and application security and performance, says plans to use net offering proceeds for general purposes, including working capital, capex, debt repayment, potential acquisitions

** Co also intends to use ~$248 mln of proceeds to pay for capped calls, derivative transactions to mitigate shareholder dilution

** Cap price initially is $469.73, which represents 175% premium to last sale

** Co has ~$59 bln market cap, per LSEG data

** Through Thurs, stock up ~59% YTD

** Of 35 analysts covering NET, 21 rate stock "strong buy" or "buy", 12 rate "hold" and 2 rate "sell" or "strong sell"; median PT is $151, according to latest LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))