Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

DoorDash valued at $71 billion in blockbuster market debut

12/09/2020 | 09:19pm EDT
A delivery person for Doordash rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City

(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.

DoorDash co-founder and Chief Executive Tony Xu, whose stake in DoorDash is worth $2.8 billion based on the stock's closing price, said he had no regrets over the company's IPO price.

"We priced our stock where we did not take every last dollar off the table but where we feel like is a true reflection of our fundamentals," Xu said in a telephone interview.

"A lot of people probably want to get access to DoorDash stock and not a of people want to sell DoorDash stock. That's how some of these price fluctuations... are constructed and created. That's never the goal of the process," Xu added.

The IPO gives DoorDash a fully diluted valuation - which includes securities such as options and restricted stock units - of $71.2 billion, far higher than the $16 billion it commanded in a June private fundraising round.

Its market capitalization is around $60.2 billion, more than restaurant chain Chipotle Mexican Grill Inc and ride-hailing company Lyft Inc combined.

Founded in 2013, DoorDash is backed by the Vision Fund managed by Japanese tech giant SoftBank Group Corp, venture capital firm Sequoia Capital and sovereign wealth fund Government of Singapore Investment Corp.

The company and rivals Uber Eats, Grubhub Inc and Postmates Inc have benefited from a surge in demand for food delivery services due to COVID-19 restrictions.

DoorDash revenue for the third quarter ended September reached $879 million, up from $239 million in a similar period last year. The company posted a loss of $43 million after reporting its first quarterly profit of $23 million three months earlier.


Highlighting investor enthusiasm for technology companies, shares in C3Ai Inc, founded by billionaire tech entrepreneur Tom Siebel, more than doubled in their debut on Wednesday, while Pubmatic, which develops software for digital  advertising businesses, saw its shares rise more than 40%.

"These high tech companies that are involved in technologies that facilitate communication like Zoom or facilitate the acceleration of digital transformation, they seem to be very well received by financial markets," Siebel said in an interview.

A number of big Silicon Valley companies, including Palantir Technologies Inc and Snowflake Inc, also had blockbuster initial public offerings (IPOs), riding on a stock market rally in the second half of the year that was fueled by stimulus money and hopes of an effective COVID-19 vaccine.

DoorDash's listing gains bode well for home rental startup Airbnb Inc, which is scheduled to make a highly-anticipated market debut on Thursday.

(Reporting by Noor Zainab Hussain in Bengaluru and Joshua Franklin in Miami; Editing by Sriraj Kalluvila, Anil D'Silva, Aurora Ellis and Tom Brown)

By Noor Zainab Hussain and Joshua Franklin

ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AIRBNB, INC. 0.21% 142.26 Delayed Quote.-3.27%
DOORDASH, INC. -2.45% 179.43 Delayed Quote.28.96%
Latest news "Economy & Forex"
03:48pTexas power grid passes first of many tests to meet demand as heatwave lingers
03:45pBiden nominates lawyer to oversee retirement plans, worker benefits
03:37pSoybeans rise for second day after U.S. crop conditions report
03:28pU.s. cdc says 163,312,474 individuals have been fully vaccinated against covid-19 as of july 27 vs 163,173,366 individuals as of july 26
03:28pU.s. cdc says 188,996,475 individuals have received at least one dose of covid-19 vaccine as of july 27 vs 188,729,282 individuals as of july 26
03:28pU.s. cdc says administered 342,607,540 doses of covid-19 vaccine as of july 27 vs 342,212,051 doses administered as of july 26
03:28pU.s. cdc says delivered 395,460,845 doses of covid-19 vaccine as of july 27 vs 394,949,575 doses delivered as of july 26
03:23pInternational investor concerns mount over China's tech rout
03:11pWall St drops as caution rises before big tech earnings, Fed
03:08pOil prices steady as virus spread counters tight supplies
Latest news "Economy & Forex"