Doordash, Inc. (DASH) has disclosed a new risk, in the Debt & Financing category.
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The analyst notes that trading in DoorDash, Inc.’s 2030 Notes, and investor preference for these instruments as an equity proxy, could weigh on the Class A common stock via related selling, hedging, and arbitrage activity. He also observes that weakness in the Class A common stock could, in turn, depress the trading price of the 2030 Notes.
He further warns that if the conditional conversion feature is triggered, noteholders may convert during specified periods, forcing DoorDash, Inc. to use cash for settlement and straining liquidity. Should the company choose to settle part of the conversion in shares, existing shareholders would face dilution and potential downward pressure on the stock price.
The average DASH stock price target is $265.07, implying 50.45% upside potential.
To learn more about Doordash, Inc.’s risk factors, click here.