Stock Market Today, Jan. 5: BigBear.ai Rises After $125 Million Convertible Debt Redemption

BigBear.ai (NYSE:BBAI), an AI decision-intelligence provider for defense and enterprises, closed Monday’s session at $5.88, up 0.68%. The stock has gained 2.62% in the past five days. Monday’s action followed fresh focus on BigBear.ai’s plan to redeem its 6% convertible notes in mid-January and eliminate around $125 million of debt.

Trading volume reached 73.4 million shares, about 38% below its three-month average of 118.6 million shares. BigBear.ai IPO'd in 2021 and has fallen 40% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) added 0.65% to finish at 6,903, while the Nasdaq Composite (NASDAQINDEX:^IXIC) climbed 0.69% to close at 23,396. Within information technology services, industry peers Palantir Technologies (NASDAQ:PLTR) and C3.ai (NYSE:AI) both posted gains.

What this means for investors

BigBear.ai announced on Friday that it would redeem all 6% convertible notes due 2029. The move will cut the artificial intelligence national security firm's note-related debt from roughly $142 million to $17 million. It says lowering its liabilities and interest expense will strengthen its balance sheet.

Recent gains could be the start of a comeback for BigBear.ai, which is down around 24% in the past six months. The company finalized its acquisition of generative AI platform, Ask Sage, at the end of last year. However, question marks remain over its ability to handle disruptions to government contracts.

Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.