DoorDash IPO: The Last Frontier for e-Commerce?

The DASH takes off even before its IPO debut, leaping an astonishing 85%

Everyone from Wall Street to Main Street, no matter who you talk to is going to have an opinion. Is DoorDash the next Facebook or the next Twitter or even Google? Is it the next What is DoorDash really worth, and is it the beginning of the next bubble?

DoorDash is a food delivery app where you order from restaurants in your area and a driver delivers your food to you. On Wednesday, December 9th, shares of Doordash began trading on the New York Stock Exchange, the NYSE for short. They began trading under the ticker symbol “DASH.” Tuesday, December 8th, the night before, prospective investors saw the shares priced at $102 each. By Wednesday morning the stock was trading at $182 per share. The next day, the closing price was $188. That is quite a change.

Wall Street was very keen on the DoorDash IPO seeing as it kicks off an exceedingly busy IPO season. This season saw the debut of Airbnb on December 10th and will see the debut of Wish which is expected before end of year.

Are You Thinking of Buying DASH?

Seeing as the stock gained over 85% on its first day of trading, you might be tempted to give a call to your advisor and request DASH be added to your portfolio. Before you do that, there are a few things to be considered.

  • DoorDash priced shares of the company at $102 on Tuesday night. The next day it topped off at $187. So the question is what happened overnight? The answer, nothing.
  • After the 85% jump in just a single day, DASH was worth double of what Uber was, at least on a revenue basis.
  • The reported revenues of DASH of $1.9 billion for the nine months ended September the 30th, according to its SEC filings.
  • The DASH reported revenues for the nine months ending September 30th of last year was $587 million.

Here is some food for thought knowing those two revenue numbers:

  • DASH reported a net loss of $533 million for the nine months ended September 30th, 2019
  • DASH reported a net loss of $149 million for the nine months ended September 30th, 2020

What investors have to keep in mind is that an investment in DASH is just an investment in a company that recently lost around $150 million in just nine months.

If you’re still questioning whether or not DASH is a good investment, well that is a tough question to answer. Sadly, only time will tell. In the meantime, if you are thinking of adding DASH to your investment portfolio, make sure you truly understand the business model and the numbers. If you’re having a hard time deciding on your own, then talk to one of the financial professionals at NEST to help you figure it all out.

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