Article: If you bought DoorDash at $180…

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If you bought DoorDash at $180…

SirGasleak, 10 December 2020

No moat at all. Sure they have 50% market share but there are competitors. They’re a delivery service – anyone can do what they do. Not only does this pose a risk to market share, but it poses a huge risk to the already thin profit margins. At some point (because of 2-4 below) they will have to lower their fees and take rate, which will hurt margins even more.

No brand value or brand loyalty. People couldn’t care less who delivers their food, as long as it shows up on time and hot. Early in COVID I was using Skipthedishes until I got frustrated with poor service so I left. There is nothing to keep customers loyal to DoorDash if someone else offers better service, or the same service at a better price.
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Article: DoorDash Soars in First Day of Trading

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DoorDash Soars in First Day of Trading

Erin Griffith, 09 December 2020

Shares of DoorDash soared in their first day of trading on Wednesday, capping a year of outsize growth for the country’s largest food delivery company. DoorDash stock rose 86 percent above its initial public offering price of $102 to close the day at $189.51.

That valued the company at $72 billion, including employee-owned shares — more than the market capitalization of Domino’s Pizza and Chipotle Mexican Grill combined. DoorDash raised $3.4 billion, making it the one of the largest I.P.O.s of the year.
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Article: DoorDash valued at $71 billion in blockbuster market debut

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DoorDash valued at $71 billion in blockbuster market debut

Noor Zainab Hussain, Joshua Franklin, 09 December 2020

(Reuters) -DoorDash Inc shares popped more than 80% in their debut on Wednesday, valuing the food delivery company at $71.3 billion or more than four times its worth at a private fundraising round six months ago, underscoring investor appetite for technology companies boosted by the COVID-19 pandemic.

Shares opened at $182 on the New York Stock Exchange, significantly above the initial public offering (IPO) price of $102 apiece and closed at $189.51. The company had raised $3.37 billion in its IPO on Tuesday.

Such a large first-day trading gain is likely to fuel criticism from some venture capital investors, including Benchmark’s Bill Gurley, who argue investment banks underprice IPOs so their investor clients can score large gains when the stock starts trading.
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Article: DoorDash IPO delivers billions to its Stanford founders

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DoorDash IPO delivers billions to its Stanford founders

Tom Maloney, 09 December 2020

Stanford University students Tony Xu, Andy Fang and Stanley Tang had a revelation seven years ago in a Palo Alto macaroon store.

The shop’s owner showed them pages and pages of delivery orders she hadn’t been able to fulfill. Demand wasn’t high enough to hire a full-time delivery person, but there was no way she could drop off all the orders herself. It was a story the three heard again and again as they worked to understand how they could leverage technology to help small businesses.

They decided to build a basic web page with menus from local restaurants to see if there was demand for a delivery business. “It was super simple, ugly, and honestly we weren’t really expecting anything,” Tang said at a Stanford lecture years later. “All of a sudden we got a phone call – someone called! They wanted to order Thai food.”
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Article: DoorDash takes a hefty cut from restaurants, and risks losing them to cheaper options

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DoorDash takes a hefty cut from restaurants, and risks losing them to cheaper options

Ari Levy, 08 December 2020

Salvatore Reina owns three Francesca pizzerias in New Jersey that have been closed for indoor dining during the pandemic. While much of his industry turned to DoorDash, Reina resisted.

“Third parties take a big cut,” said Reina, who opened his first pizzeria 12 years ago, about 20 miles outside of New York City. “I’d rather spend those marketing dollars to get people directly.”

As DoorDash prepares for its public market debut, an offering that could value the delivery app service at over $30 billion, the San Francisco-based company has to show that it can make enough money on every order to turn into a profitable business. Meanwhile, investors have to consider how many restaurant owners will eventually turn away from apps like DoorDash because the costs are too high for their low-margin operations.
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Article: DOORDASH IPO HAS ITS SKEPTICS

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DOORDASH IPO HAS ITS SKEPTICS

Joe Guszkowski, 08 December 2020

Third-party delivery company DoorDash will set a share price for its initial public offering Tuesday, riding a wave of momentum that could bring it a valuation of more than $30 billion.

In the latest sign of demand for its stock, the company on Friday raised the price range for its shares to between $90 and $95, up from $75 to $85.

But not everyone shares that enthusiasm about the IPO. Some investors question the terms of the offering and the company’s readiness for the public market, while others believe its growth runway is shrinking.

On Monday, CtW Investment Group sent a letter to DoorDash’s board raising concerns about the IPO’s share structure and how the company characterized public reaction to a former tipping policy. CtW works with union-sponsored pension funds.
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Article: DoorDash Gets a Bullish Rating and Price Target Before It Starts Trading

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DoorDash Gets a Bullish Rating and Price Target Before It Starts Trading

Rhian Hunt, 02 December 2020

Food delivery IPO DoorDash, rival to Grubhub (NYSE:GRUB) and other restaurant delivery services, attracted its first major analyst rating even before its shares are actually trading on the stock exchange. The news site Benzinga reported yesterday that investment banking, wealth management, and financial analysis firm D.A. Davidson rated the company as a buy and gave its stock a speculative price target of $93 per share.

Davidson analyst Tom White laid out a bull case for DoorDash based on several metrics, including its 2020 U.S. delivery market share of 50%. That is up from a 36% share at the year’s beginning and 17% two years ago. White also points out that the company still has lots of room for growth, providing service to just 6% of America’s population and handling 3% of off-premise restaurant sales (18 million customers and $8 billion in gross order value, respectively). The $93 price target represents a sixfold multiple of DoorDash’s enterprise-value-to-sales (EV/sales) ratio.
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Article: DoorDash: great unit economics, but many unanswered questions

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DoorDash: great unit economics, but many unanswered questions

Daniel McCarthy, 01 December 2020

A lot of people have a lot of different opinions about DoorDash in light of their pre-IPO S-1 filing. Many reporters and pundits are concerned about profitability in the restaurant meal delivery category as a whole, wondering whether any of these firms could ever sustainably turn a profit. Many others are more optimistic, pointing to some of the (many) customer-related disclosures that DASH scattered throughout its S-1. And of course, all of this uncertainty is only further compounded by COVID, which was and has continued to be a big shot in the arm for everyone in the category, but introduces yet more uncertainty about how the world will look post-pandemic.

Given my own academic research with Elliot Oblander and Kivan Polimis into the industry, which I will hopefully be able to link to over the next couple of months (if you’re interested, shoot me an email and I’ll make sure send it to you as soon as it breaks!), and given the volume of disclosures that DoorDash provided in the S-1, I took a closer look at the company to uncover what its underlying unit economic condition currently looks like, how COVID has impacted it, and what their “normalized” economics may be after stripping out pandemic-driven behavioral changes.
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Article: 4 Things to Know From DoorDash’s IPO Filing

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4 Things to Know From DoorDash’s IPO Filing

Evan Niu, 17 November 2020

DoorDash has at long last filed the public version of its S-1 Registration Statement with the SEC, nearly nine months after submitting a confidential version to the SEC. The leading food delivery platform has opened its books for prospective investors ahead of going public through an IPO. The upcoming debut comes as Grubhub (NYSE: GRUB) is preparing to be acquired by Just Eat Takeaway. The company plans to list on the New York Stock Exchange under the symbol “DASH.”
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Article: DoorDash delivers an IPO filing

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DoorDash delivers an IPO filing

Robinhood Snacks, 16 November 2020

Drooling all over the S-1… DoorDash released its IPO paperwork on Friday, and didn’t hold back with the high-res food pics (so many poke bowls). Companies that are going public have to file a prospectus with the SEC so investors can get informed. Here’s what DoorDash delivered:

#1 food deliverer in the US: DoorDash has an enviable 50% share of the market. Uber Eats has 26%, Grubhub has 16%, and Postmates (which Uber’s buying) has 7%.
Sales more than tripled to $1.9B from January to September compared to the same period in 2019. 18M customers, 1M Dashers, and 390K merchants now use DoorDash’s platform.
It’s still not profitable. Buuuut: DoorDash significantly cut its net loss from $533M in the 2019 period to $149M in 2020.
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Article: DoorDash files for IPO, shows surging revenue during pandemic

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DoorDash files for IPO, shows surging revenue during pandemic

Emily Bary and Levi Sumagaysay, 13 November 2020

DoorDash Inc., the leading food-delivery app in the nation, filed paperwork Friday morning for an initial public offering, giving investors a first glimpse into its fast revenue growth amid the pandemic — and its continued losses.

The COVID-19 pandemic has been a boon to delivery businesses as people have had to stay home and in many cases outsource their shopping or food pickup. The company’s filing with the Securities and Exchange Commission shows just how big of a boost it has received. DoorDash’s revenue rose to $1.92 billion through the first nine months of the year, a 227% increase from the year-ago period, according to the company’s filing.

The San Francisco-based company, which said in a prospectus that its mission is “to grow and empower local economies,” intends to trade on the New York Stock Exchange under the ticker “DASH.”
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Article: DoorDash IPO filing shows huge growth and lots of risk

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DoorDash IPO filing shows huge growth and lots of risk

Dara Kerr, Carrie Mihalcik, 14 November 2020

Food delivery service DoorDash on Friday filed paperwork with the US Securities and Exchange Commission for an initial public offering. The S-1 filing, more than 200 pages long, shows that the company reported $1.9 billion in revenue for the nine months that ended Sept. 30, up from $587 million during the same period last year.

The company also reported a net loss of $149 million in the first nine months of this year, which is less than the $533 million net loss it reported during the same time in 2019.
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