What happened and why? DoorDash (-2.11%) wet investors IPO appetite going public on Wednesday and crushing all expectations by opening up with a $190 share price > +86% above their initial public offering price 🤯. This week has marked a winter IPO frenzy with the likes of DoorDash and Airbnb (more on that later) taking Wall Street by storm. 🥡 One’s loss is another one’s gain... DoorDash, a US meal delivery giant, has revelled in restaurants' pandemic misfortune. Due to worldwide safety restrictions, our favourite dining haunts had to close their doors for customers and count on take-away deliveries to 'survive'. In comes DoorDash, which as of January 2020 accounts for the widest share of the US food delivery market. You get where we're going... The food-tech company, described as ‘the most ridiculous IPO of 2020’ prior to going public, exceeded forecasts by landing a stupendous market value of $60bn in its public trading debut. 🔝 Top dog... With a prosperous year behind them, DoorDash had some tidy numbers to deliver to shareholders: Banking $23m of profit in the second quarter of 2020 thanks to the increase in take-away delivery.Big winners... Softbank and Sequoia, the DD's two major stakeholders - with around 40% of the company - have seen a remarkable increase in the value of their stake. ⛈️ It’s not all sunshine and rainbows… The largest player on the US meal delivery market has also faced retaliation from restaurants complaining about their high commission fees. Company's big shots had to intervene and DoorDash is reviewing their commission rates. The Takeaway Despite its booming initial public offering, investors are reluctant when it comes to the industry's future. DoorDash, Uber Eats sustainable profitability has consistently been called into question. Greater consolidation and mergers feel like an inevitability. In the meantime, NASDAQ is up by +66%, reaching a new high thanks to new arrivals, DoorDash and now Airbnb...
