Hims & Hers Health Inc. (HIMS) shares plummeted 6.72% during intraday trading on Monday, extending recent weakness for the telehealth company.

The sharp decline followed the company's announcement of a proposed $300 million private offering of convertible senior notes due 2032, with an option for initial purchasers to buy up to an additional $45 million. Market participants expressed concerns that the potential conversion of these notes could lead to equity dilution for existing shareholders. Proceeds are earmarked to support international expansion, including the proposed acquisition of Eucalyptus, as well as investments in technology and AI capabilities.

Compounding the negative sentiment was the company's recent disappointing first-quarter earnings report. Hims & Hers posted an unexpected net loss of $92 million, nearly doubling from the year-ago period, with revenue of $608.1 million falling short of analyst expectations. The company's strategic pivot away from higher-margin compounded GLP-1 medications toward branded products at lower margins has also pressured near-term profitability and weighed on investor sentiment.