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SAN FRANCISCO - DoorDash Inc. (NASDAQ: DASH), a prominent global local commerce platform with a market capitalization of $87.35 billion and an impressive 82% return over the past year, has upsized its private offering of convertible senior notes to qualified institutional buyers, raising the amount from an initially announced $2.0 billion to $2.5 billion. According to InvestingPro analysis, the company maintains a strong financial position, holding more cash than debt on its balance sheet. The convertible senior notes, which carry a 0% interest rate and are due in 2030, are expected to settle on May 30, 2025, subject to customary closing conditions.
The notes, which are senior and unsecured, will mature on May 15, 2030, unless they are repurchased, redeemed, or converted earlier according to their terms. They will not bear regular interest and the principal amount will not accrete. The notes will be convertible under certain conditions and during specified periods before November 15, 2029, and anytime thereafter until just before their maturity date.
Upon conversion, the notes may be settled in cash, shares of DoorDash’s Class A common stock, or a combination thereof. The initial conversion rate is set at 3.4250 shares per $1,000 principal amount of notes, which equates to an initial conversion price of about $291.97 per share, a 42.50% premium over the last reported sale price of DoorDash’s stock as of May 27, 2025.
DoorDash has also entered into convertible note hedge transactions to minimize potential dilution upon conversion of the notes and to offset any cash payments exceeding the principal amount upon conversion. The company’s financial health score of "GOOD" from InvestingPro and current ratio of 1.72 indicate strong liquidity management, with liquid assets well exceeding short-term obligations. Concurrently, DoorDash engaged in warrant transactions with a strike price of $512.225 per share, which could have a dilutive effect if the company’s stock price surpasses the strike price, unless DoorDash opts for cash settlement.
The company estimates net proceeds from the offering to be approximately $2,472 million after deducting discounts and estimated expenses. The funds are intended for general corporate purposes, including potential acquisitions, share repurchases, and the cost of the convertible note hedge transactions. If the option to purchase additional notes is exercised, DoorDash plans to use the proceeds to enter into additional convertible note hedge transactions.
This activity is based on a press release statement and has not been registered under the U.S. Securities Act or any state securities laws. The offering and sale of the notes and related common stock are restricted to qualified institutional buyers according to Rule 144A under the Securities Act. DoorDash makes no offer or solicitation for the sale of the notes or common stock in any jurisdiction where such an action would be unlawful.
DoorDash emphasizes its role in connecting consumers with local businesses and providing flexible earning opportunities, having expanded its operations to over 30 countries since its founding in 2013. The company has demonstrated robust growth with revenue increasing by 23.35% over the last twelve months to $11.24 billion. While currently trading at premium valuations, InvestingPro offers 13 additional key insights about DoorDash’s valuation and growth prospects, available through its comprehensive Pro Research Report, which provides deep-dive analysis of what really matters for informed investment decisions.
In other recent news, DoorDash has announced a $2 billion offering of convertible senior notes due in 2030, aimed at qualified institutional buyers. The proceeds from this offering will be used for hedge transactions and general corporate purposes, including potential acquisitions and share repurchases. Additionally, DoorDash has discontinued its voice-ordering product pilot for restaurant clients, following an assessment of customer demand and product-market fit. Meanwhile, the company introduced its Preferred Integrations Partner Program, which aims to help restaurants streamline their operations with top-tier technology providers. Otter is among the first partners in this initiative, enhancing delivery performance and revenue growth for restaurants.
In terms of acquisitions, DoorDash is set to acquire Deliveroo for approximately £2.9 billion and SevenRooms for $1.2 billion, aiming to expand its market presence and service offerings. BMO Capital Markets has slightly reduced DoorDash’s price target to $238 but maintained an Outperform rating, citing the scale opportunities from the Deliveroo acquisition. Benchmark analysts have raised DoorDash’s price target to $225, maintaining a Buy rating, and noted the company’s focus on affordability and international market exposure. These developments highlight DoorDash’s strategic moves to strengthen its position in the competitive food delivery and technology services market.
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