Shares of Lyft (NASDAQ:LYFT) jumped 4% Wednesday morning after the ride-hailing company announced the pricing of $450 million in convertible senior notes due 2030, with trading in call options seeing elevated volumes.
The notes, aimed at qualified institutional buyers, are scheduled to settle on September 5, 2025, and are expected to generate approximately $438.8 million in net proceeds after expenses. Lyft also granted initial purchasers an option to acquire an additional $50 million in notes.
These convertible notes are senior, unsecured obligations maturing on September 15, 2030, with an initial conversion rate of 42.5170 shares per $1,000 principal, implying a conversion price of roughly $23.52 per share—a 40% premium over Lyft’s closing price of $16.80 on September 2, 2025.
To mitigate potential dilution, Lyft entered into capped call transactions with financial institutions. The company plans to allocate $37.8 million of the proceeds to cover these transactions and roughly $95.7 million to repurchase about 5.7 million shares of Class A common stock.
The remaining proceeds will support future stock repurchases under Lyft’s existing plan and general corporate purposes, including working capital, capital expenditures, and potential acquisitions.
Lyft cannot redeem the notes before September 20, 2028, after which redemption may occur under specific conditions if the stock price has been at least 130% of the conversion price for a designated period.
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