In the middle of the busiest December ever for IPOs – and a scorching market reaching new heights – shares of the food delivery app DoorDash jumped 80% on Wednesday during the The company’s long-awaited first day of trading on the New York Stock Exchange, catapulting the company’s market capitalization to more than four times its last private valuation six months ago.
Shares of DoorDash began trading at around 12:45 p.m. EST Wednesday, rising 86% to $ 188 from an offer price of $ 102 per share on Tuesday, when the company raised nearly $ 3.4 billion. dollars.
Soaring stocks pushed the company’s market cap to around $ 59 billion, about four times higher than DoorDash’s last private market valuation of $ 15 billion in June.
The San Francisco-based company initially increased its bid by offering a maximum share price of $ 95 on Friday, compared to a maximum of $ 85 per share when the company filed for a stock market application in November.
Founded in July 2013 by a group of Stanford students, DoorDash announced plans to use the proceeds of its IPO to improve its game in small local markets such as the suburbs, where it has vastly outperformed competition from rivals such as UberEats, Postmates, and Grubhub.
In a year when $ 160 billion was raised in IPOs, DoorDash’s public market debut is the third largest, behind that of a blank check firm sponsored by the billionaire hedge fund manager Bill Ackman and burgeoning cloud start-up Snowflake.
The larger market climbed to new highs early Wednesday before falling slightly at noon, with the S&P 500 and Dow Jones Industrial Average each falling less than half a percentage point when DoorDash began trading.
DoorDash “enters the public market as a dominant player in the food delivery space,” explains market research firm Cardify, noting that the company’s market share is highest in delivery food, at 36% in November (Postmates was second at 33%). “DoorDash’s dominance appears to come from loyalty. While UberEats briefly eclipsed DoorDash on loyalty in the summer, it quickly fell below 60% loyalty as DoorDash retained over 65% of customers month after month. “
“It took a global pandemic to generate a quarter of the company’s profitability – the company hasn’t been profitable since, and we believe it may never be,” said David Trainer, CEO from investment research firm New Constructs, citing a profit of $ 23 million. at the height of the pandemic in the second trimester. Investors shouldn’t expect “skyrocketing revenue growth rates to advance,” he adds, indicating sales growth of 268% year over year in the third quarter, ” especially if the Covid-19 vaccination efforts produce significant vaccination in the coming months, allowing consumers to return to a more normal eating routine. “
DoorDash’s IPO hit three new billionaires: CEO Tony Xu, 36, and fellow co-founders Andy Fang, 28, and Stanley Tang, 27.
Home rental giant Airbnb is expected to debut on the Nasdaq on Thursday, but will assess its shares on Wednesday. On Monday, the firm said it plans to offer them between $ 56 and $ 60 each, against a previously expected range of $ 44 to $ 50.
DoorDash IPO delivers three billionaires as Wall Street ignores menu of losses (Forbes)
Airbnb, DoorDash, Billionaire Tom Siebel C3.ai Boost Public Market Debut, Speed Up December’s Biggest Month for IPOs (Forbes)