With $544 million in hedge fund investment in the stock as of Q1 2026, Peabody Energy Corporation (NYSE:BTU) is among the best coal stocks to invest in.
Peabody Energy Corporation (NYSE:BTU) shares jumped nearly 10% on May 28, 2026, the same day the company priced a $225 million offering of convertible notes.
The notes, due June 1, 2031, carry a 0.50% annual interest rate and are set to settle June 2, 2026. The initial conversion price is approximately $38.32 per share, a 32.5% premium over Peabody’s volume-weighted average price of $28.9197 on May 28, 2026. Peabody Energy Corporation (NYSE:BTU) also granted initial purchasers an option to buy up to an additional $25 million in notes. Net proceeds are estimated at approximately $218.9 million, rising to roughly $243.3 million if the overallotment is fully exercised.
The primary use of proceeds is to fund roughly $15 million of capped call transactions, which are designed to reduce potential dilution up to a cap price of $50.6095 per share, a 75% premium to the May 28 reference price. The bulk of the remaining proceeds, combined with available cash, will fund the repurchase of approximately $241.2 million in aggregate principal of its outstanding 3.250% Convertible Senior Notes due 2028, at a cash purchase price of approximately $388.8 million.
The transaction effectively extends Peabody Energy Corporation (NYSE:BTU)’s debt maturity profile while layering in dilution protection at meaningfully higher share price levels.
The offering came alongside first-quarter 2026 results reported on May 5, 2026, in which Peabody Energy Corporation (NYSE:BTU) posted adjusted EBITDA of $82.5 million and a net loss of $32.4 million, or $0.27 per diluted share, weighed down by commissioning challenges at Centurion.
Thermal segments held up, with CEO Jim Grech citing strong demand and higher realized pricing amid global energy market volatility.
Peabody Energy Corporation (NYSE:BTU) is the world’s largest private-sector coal company, focusing on mining, marketing, and trading metallurgical and thermal coal. It supplies coal to power generators and steel manufacturers across 25+ countries, with key operations in the U.S. and Australia.
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