Amazon supercharges Generac

Generac Holdings is up 33% in pre-market action after disclosing a long-term supply agreement with Amazon.

The agreement calls for $2.4 billion of initial generator deliveries in 2027 and 2028.

It could eventually generate as much as $8 billion in payments to Generac and its global affiliates, according to a regulatory filing.

The generators will provide backup power for Amazon data centers.

As part of the transaction, Generac issued an Amazon subsidiary a warrant to purchase as many as 1.69 million Generac shares at an exercise price of about $200 each.

About 307,000 shares covered by the warrant vested immediately.

The remainder will vest in stages as Generac receives payments connected with Amazon's generator purchases, up to the $8 billion threshold.

The warrant can be exercised through September 16th of 2033, subject to its vesting terms and other conditions.

Amazon may exercise it by paying cash or through a cashless transaction.