Shares of Waitr Holdings (NASDAQ:WTRH) popped by as much as 16% today after food delivery giant DoorDash (NYSE:DASH) priced its IPO at $102 yesterday evening, above the expected valuation range of $90 to $95. That range was increased earlier this month. As of 1 p.m. EST, Waitr shares were still up 8%.
Beyond higher-than-expected pricing, DoorDash shares have leapt out of the gate on the first day of trading. The stock is currently trading around $183, or nearly 80% higher than the IPO price. The strong debut is boosting other companies within the food delivery sector, such as Waitr and Grubhub, which is preparing to be acquired by Just Eat Takeaway in an all-stock transaction. Both Grubhub and Just Eat Takeaway stocks are up about 7% each.
Uber shares were up a modest 3%, perhaps because the company's Uber Eats food delivery segment is relatively smaller than the core ridesharing business under normal non-pandemic circumstances.
Investors in the food delivery sector are cheering DoorDash's splashy entrance into the public markets, as demand for food delivery services has skyrocketed during the COVID-19 crisis. As a smaller regional platform, Waitr hasn't enjoyed quite the same level of growth as its larger peers. Revenue was up just 7% in the third quarter, compared to DoorDash's 268% growth during the same period. Waitr also noted recently that it faces other regional challenges, as hurricanes have been battering the Southern states where it predominantly operates.