DoorDash dips after upsized $2.5 bln convertible bond sale

Deliveroo

28/05/2025 11:53

** DoorDash's DASH.O shares down 0.3% premarket at $204.20 after meal delivery platform clinches capital raise

** San Francisco-based DoorDash late Tues announced pricing offering of $2.5 bln 0% 5-yr convertible bonds

** Offering size boosted from $2 bln; initial conversion price of $291.87 represents 42.5% premium to stock's last sale

** In addition, co entered hedge transactions to offset share dilution with strike price of $512.225, 150% above stock's last close

** Co intends to use portion of net offering proceeds to fund cost of hedge transactions, rest for general purposes, including potential acquisitions and share repurchases

** Earlier this month, DoorDash said it will buy British rival Deliveroo ROO.L in deal valued at $3.9 bln, and would buy software firm SevenRooms for ~$1.2 bln

** DASH shares on Tues finished down 0.6% at $204.89, giving co roughly $87 bln market cap, per LSEG data

** YTD, shares up 22% YTD

** 29 of 41 analysts covering DASH rate stock "strong buy" or "buy", 12 rate "hold"; median PT is $223.50, latest LSEG data shows

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))