Almonty's $700M Convertible Note Draws Institutional Frenzy, But Dilution Fears Trigger 12% Selloff

Almonty Industries' $700M convertible bond, oversubscribed in 24 hours, sends shares down 12% on dilution concerns, but strong tungsten prices and Russell index inclusion loom.

The same convertible bond that drew a stampede of institutional investors into Almonty Industries within 24 hours sent the company’s shares tumbling roughly 12% in after-hours trading on Thursday. The $700 million senior secured note due 2031 was oversubscribed almost immediately, with lead banks also granted a 13-day option to purchase an additional $100 million. Yet the market’s initial verdict was decidedly bearish: investors focused on the dilution potential of a conversion price set at approximately $27.40 per share, barely below the current trading level.

The notes carry a 2.25% coupon payable semi-annually from January 2027. After underwriting discounts and expenses, Almonty expects net proceeds of roughly $676 million, or about $773 million if the greenshoe is fully exercised. The bulk of the capital — some $543 million — will go toward working capital, general corporate purposes and potential acquisitions. Another $83 million is earmarked for capped-call transactions designed to limit equity dilution upon conversion, while $50 million will refinance existing debt. Almonty can call the bonds from July 2029 onward, provided the stock trades above 130% of the conversion price for a specified period.

The financing comes against a backdrop of operational momentum that has made Almonty one of the sector’s top performers. In the first quarter of 2026, revenue surged 221% to $25.4 million, driven by tungsten prices that have more than tripled since the start of the year to around $3,040 per metric tonne unit. The company swung to positive operating cash flow of $9.7 million from negative $4.4 million a year earlier, while adjusted EBITDA hit $6.1 million. The strong showing has won unanimous analyst support: eight of nine analysts rate the stock a buy, with Oppenheimer and D.A. Davidson both assigning a $25 price target and an outperform rating.

A structural catalyst looms on June 29, when Almonty is set to join both the Russell 1000 and Russell 3000 indices. With roughly $12.2 trillion in assets benchmarked to the Russell family, index funds and ETFs will be compelled to buy shares according to the company’s weighting — a forced inflow that could offset near-term dilution concerns. The stock closed Thursday at C$28.86, having gained roughly 140% year to date and more than 500% over the past twelve months.

The company’s annual general meeting is scheduled for June 9 in Toronto, where shareholders will vote on board and governance matters. The timing of the convertible announcement — coinciding with the proxy voting deadline — added an element of surprise, but management’s broader strategy appears clear: lock in cheap, long-duration capital while tungsten markets are blazing hot, then deploy it to scale up production and pursue strategic acquisitions. Whether the selloff proves a buying opportunity or the start of a correction depends on how quickly the market reprises the balance between near-term dilution and long-term growth.