DoorDash Inc. has authorized a $ 400 million repurchase of its shares, according to a regulatory document Thursday.
he said in his presentation that he is making the move to try to compensate for the dilution of his employees ’share compensation program.
The delivery application platform, which was released in 2020, has reported continued growth during the coronavirus pandemic and has indicated that it is focused on maintaining that growth. Since the end of last year, its shares have steadily declined. Shares of DoorDash have closed at historic lows recently and are down 55% so far. They closed 5.2% higher on Thursday at $ 66.95, up less than 0.5% on extended trading.
DoorDash is growing, but still records net losses, though during its last earnings call in early May, CEO Tony Xu said $ 4 billion in cash flows give the company a lot of flexibility. He hinted that he did not want to grow by acquisition.
Tom White, an analyst at DA Davidson, said Thursday that a buyback is “generally a bullish sign around the outlook for cash flow for the business and the company’s outlook on the business.”
Market analysts had predicted that repurchases, which reached a record last year, would continue and perhaps surpass this year’s record.