By Levi Sumagaysay
DoorDash Inc. has authorized a buyback of up to $400 million of its shares, according to a regulatory filing Thursday.
DoorDash /zigman2/quotes/222973991/composite DASH +10.23% said in its filing that it’s making the move in an effort to offset dilution from its employees’ stock-compensation program.
The delivery-app platform, which went public in 2020, has reported continued growth during the coronavirus pandemic and has indicated it is focused on sustaining that growth. It has seen its stock decline steadily since late last year. DoorDash shares have closed at record lows recently and are down 55% year to date. They closed 5.2% higher Thursday at $66.95, and rose less than 0.5% in extended trading.
DoorDash is growing but still posting net losses , though during its latest earnings call in early May, Chief Executive Tony Xu said $4 billion in cash flow gives the company a lot of flexibility. He hinted he wasn’t keen on growing by acquisition.
Tom White, analyst for D.A. Davidson, said Thursday that a buyback is “generally a bullish sign around the cash-flow outlook for the business and the company’s view on the business.”
Market analysts had predicted that buybacks, which reached a record last year , would continue and maybe surpass the record this year.