DoorDash, Inc. (NASDAQ:DASH) shares are trading slightly lower on Tuesday. The company is initiating a significant capital raise as part of its efforts to preserve financial flexibility and support future strategic initiatives.

The food delivery company has announced plans to issue $2 billion in convertible senior notes due in 2030 through a private offering to qualified institutional investors.

Additionally, DoorDash is giving initial buyers the opportunity to purchase up to $200 million more in notes.

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The capital raised will help fund possible acquisitions and share repurchases, with part of the proceeds going toward hedge strategies to reduce dilution.

The planned notes will be unsecured and senior, with interest paid semi-annually. They are set to mature in May 2030.

To cushion potential equity dilution from the convertible notes, DoorDash plans to initiate hedge transactions.

A portion of the proceeds will be used to purchase a hedge overlay intended to offset any share dilution until at least a targeted 125% premium to the current stock price, the company said in a press release.

According to Benzinga Pro, DASH stock has gained over 83% in the past year. Investors can gain exposure to the stock via AdvisorShares Restaurant ETF (NYSE:EATZ).

Price Action: DASH shares are trading lower by 0.23% to $205.67 at last check Tuesday.

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