How will the $605.6 million net proceeds from the convertible notes be allocated – for growth initiatives, debt repayment, or other purposes?

The filing does not spell out a specific use‑of‑funds plan, but DigitalOcean’s management has repeatedly emphasized that the convertible‑note transaction is intended to fuel the next phase of growth while also giving the company flexibility to shore up its balance sheet. In practice, the $605.6 million of net proceeds will most likely be split between:

1. Growth‑capital initiatives – expanding its managed‑services platform, accelerating product‑development (e.g., new Kubernetes, serverless and managed database offerings) and deepening its sales and marketing footprint to capture market share in the fast‑growing cloud‑infrastructure segment.
   
2. Liquidity and debt‑management – repaying a portion of existing high‑cost debt, refinancing maturing facilities and building a cash‑reserve buffer that can be drawn on for opportunistic M&A or to smooth cash‑flow volatility.

From a trading perspective, the market will price the note‑closing as a positive catalyst if the company follows through on the growth‑capital narrative, because it should translate into higher top‑line growth and expanding margins—key drivers for a re‑rating of DOC N’s valuation multiples. Conversely, a heavy tilt toward debt repayment would mainly improve the balance‑sheet profile (lower leverage, higher credit quality) and could tighten the stock’s risk premium, supporting a modest upside but limiting upside on the growth story.

Actionable take‑away: Keep an eye on DigitalOcean’s forthcoming earnings call and any “use‑of‑proceeds” disclosure in the next 10‑K filing. If management signals a clear, sizable allocation to product expansion and sales acceleration, consider a long‑position or adding to existing exposure, as the upside from accelerated revenue growth could outpace the modest upside from balance‑sheet cleanup alone. If the proceeds are earmarked largely for refinancing existing debt, the move is more defensive; a short‑to‑neutral stance may be more appropriate until the company demonstrates that the capital will be reinvested into higher‑return growth projects.