DoorDash (NYSE:HYPHEN) has been open for 14 trading days since its initial public offering on December 8. On its first day of trading, DoorDash stock gained nearly 86%, closing pennies below $ 190.
Over the next 13 days, he lost ground 10 times. Down 28% from its first-day high of $ 195.50, you might want to consider a Canadian alternative before purchasing DoorDash’s two-week low.
Who is Facedrive?
Facedrive (OTCMKTS:FDVRF) has a total of five verticals: Facedrive Rideshare (carpooling), Facedrive Marketplace (sustainable e-commerce platform), Facedrive Foods (food delivery), Facedrive Social (e-social platform) and Facedrive Health (contact search and health)).
That’s a lot of businesses for a business that doesn’t have a lot of income. Needless to say, plunging money into shares of Facedrive is a riskier proposition than buying inflated shares of DoorDash.
That said, I find her Steer electric vehicle underwriting business interesting, which she acquired in September 2020 for $ 3.5 million worth of her shares. Facedrive acquired the company from a subsidiary of Exelon (NASDAQ:EXC), the Chicago-based utility. As part of the agreement, the Exelon subsidiary made a strategic investment of $ 2 million in Facedrive.
This business has a lot of moving parts, you might want to wait a few quarters to see which of the five verticals seems to stick.
Is Facedrive cheaper than stock DoorDash?
I’ll be the first to admit that I had never heard of the Toronto-based rideshare company before seeing an article in Oil explaining why DoorDash was the hottest IPO of 2020.
Thanks to Oil contributor Paul Fisher for advice on Facedrive.
As someone who likes to point out different options InvestorPlace readers, I couldn’t resist taking a closer look at the Canadian company that has been making acquisitions in 2020.
According to the company’s Q3 2020 MD&A of November 27, Facedrive acquired certain assets from Foodora Canada bankruptcy in July for 562,000 CAD ($ 438,360). In October, it acquired Food Hwy, Canada’s leading ethnic and student food delivery service, for CAD 1.5 million ($ 1.17 million) in cash and CAD 7.6 million ($ 5.93 million). $) in Facedrive shares.
Although it has been overwhelmed with acquiring other companies, investors should not confuse Facedrive with DoorDash in terms of sales.
In the first nine months of 2020, DoorDash achieved sales of $ 1.92 billion, almost four times more than a year earlier. By comparison, Facedrive had C $ 748 million ($ 585 million) in its first nine months through the end of September.
InvestorPlace Larry Ramer recently pointed out that DoorDash is trading more than 10 times analysts’ 2021 sales estimate. This was based on a market cap of $ 51 billion. At the current market cap of $ 44.5 billion, it has a price-to-sell ratio of 8.7, a little cheaper, but still not cheap.
Ramer points out that both GrubHub (NYSE:WORM) and Postmates were acquired in recent deals that valued companies between 4 and 5 times sales. So, yes, DoorDash is not cheap.
As for Facedrive’s Q3 2020 financial statements to Sedar, the company had 91.4 million shares outstanding at the end of September. Based on a stock price of $ 13 as of this writing, it has a market cap of $ 1.19 billion and a P / S ratio of 1,500 based on sales over 12. month of CAD 980,000 ($ 764,000).
The short answer is that Facedrive is not cheaper than DoorDash, but they both lose a load of money.
The bottom line
If I was going to invest in a losing large cap stock, DoorDash certainly wouldn’t. I don’t care what the future of food delivery services looks like.
As for Facedrive, he doesn’t seem to know what he wants to be when he grows up, which means your investment is going to be seriously diluted in the future as he continues to sell stocks to fund his grand plan of providing services that bring a healthier planet.
If I had a few thousand dollars in fun money to play, Facedrive, despite its obvious lack of real income, is an intriguing action to play. You may want to put it on your “Fun Money” watch list.
As of the publication date, Will Ashworth does not hold (neither directly nor indirectly) any position in any of the securities mentioned in this article.
Will Ashworth has been writing about investing full time since 2008. His publications include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger and several others in the United States and Canada. He especially enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. As of this writing, Will Ashworth does not hold a position in any of the aforementioned securities.