After speculation that DoorDash, the meal delivery company with the biggest market share at over 50%, would make its initial public offering (IPO) with a high-end price of $90 to $95 per share, the soon-to-be-public enterprise outdid even these high estimates with a $102 initial offer. CNBC broke the news today, based on anonymous sources.
On a diluted basis, the $102 share price indicates DoorDash values itself at $38.7 billion. If realized, this will make the company the second biggest IPO of 2020, and raise $3.4 billion in cash for its operations, according to Business Insider. Initially, DoorDash said it would price its shares at $75 to $85 each, but soon raised it to $90 to $95, then to today's figure.
DASH is the ticker DoorDash will use once public, and it will appear on the New York Stock Exchange rather than the technology-oriented Nasdaq. Its IPO seems to be one among a year-end flurry of IPOs, with the biggest six offerings (including DoorDash) stacking up to approximately $9 billion, according to Forbes.
The question remains as to whether DoorDash can make its public debut work out as it clearly hopes, and see its share value go up from here. Like its competitor Grubhub (GRUB), DoorDash generates large and growing sales, but can't seem to turn these into profits. Revenue is growing more than 200% year over year, yet the delivery company continues to generate a steady string of net losses.
Equity firm D.A. Davidson gave DoorDash a bullish thumbs up before the most recent details emerged, but the firm's $93 price target would now represent a downgrade from the actual IPO.