Hey traders, we have another big initial public offering launching today with the DoorDash IPO, so am I buying or selling?
First, some background…
DoorDash (NYSE: DASH) is a food-delivery company offering 33 million shares to investors beginning today, reportedly between $90-$95 each. That’s up a big tick from the previous price range of $75-$85 for the DoorDash IPO.
The company was founded in October 2012 and it’s sort of an off-shoot from ride-sharing, gig-economy companies like Uber Technologies Inc. (NYSE: UBER) and Lyft Inc. (Nasdaq: LYFT). Like these two, DoorDash also has an app where people can order food and services from merchants.
DoorDash is reportedly working with nearly 400,000 merchants with a total customer base of 18 million people. DoorDash also has partnerships with 175 of the 200 biggest national restaurant chains, and a monthly membership service that has 5 million subscribers. It also has operations in the U.S., Canada and Australia.
This makes the DoorDash IPO one to watch, and potential buyers are lining up…
Is the DoorDash IPO a Buy?
It’s no surprise that a company like DoorDash has seen a huge boost from the coronavirus pandemic. Millions of people are stuck at home and hundreds of thousands of restaurants have been crushed, leaving them scrambling to find reliable delivery services.
But does that make the DoorDash IPO a good buy at $90-$95 a share?
Looking back at this company’s closest comparison, Uber, DoorDash is banking on the similar trend we saw with Uber Eats during the pandemic. Uber Eats has become super popular, and that’s a big reason why DoorDash is going public now.
It’s taking advantage of the new work-from-home economy and it gets about 30% of the total sale from restaurants — which is outrageous, but great for DoorDash!
But that could also mean restaurants will look to other, cheaper alternatives.
Check out my video on the DoorDash IPO and get my full thoughts on whether this sky-high tech company is worth your time or not. Then let us know in the comments if this is a stock you have your eye on, and why or why not.