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Investing.com -- Lyft (NASDAQ:LYFT) stock rose 4% Wednesday morning after the ride-sharing company announced the pricing of $450 million in convertible senior notes due 2030. The surge coincided with high volume in call options.
The notes, which will be sold to qualified institutional buyers, are expected to settle on September 5, 2025, generating approximately $438.8 million in net proceeds after expenses. Lyft also granted initial purchasers an option to buy up to an additional $50 million in notes.
The convertible notes will be senior, unsecured obligations maturing on September 15, 2030, with an initial conversion rate of 42.5170 shares per $1,000 principal amount. This represents a conversion price of approximately $23.52 per share, a 40% premium over Lyft’s closing price of $16.80 on September 2, 2025.
In connection with the offering, Lyft entered into capped call transactions with financial institutions to reduce potential dilution from the notes. The company plans to use approximately $37.8 million of the proceeds to pay for these transactions and about $95.7 million to repurchase approximately 5.7 million shares of its Class A common stock.
The remaining proceeds will fund potential future stock repurchases under Lyft’s existing plan and general corporate purposes, including working capital, capital expenditures, and possible acquisitions.
Lyft cannot redeem the notes before September 20, 2028, after which it may do so under certain conditions if its stock price has been at least 130% of the conversion price for a specified period.
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