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A DoorDash Inc. delivery bag sits on the floor at Chef Geoff's restaurant in Washington, D.C., U.S., on Thursday, March 26, 2020. As the wheels of government turn too slowly for small businesses desperate for a piece of the $2 trillion U.S. relief package due to the coronavirus pandemic, restaurateur Geoff Tracy is using GoFundMe to raise money for 150 hourly workers at his American comfort food standby Chef Geoff's and other restaurants.
(Bloomberg) -- Shares of food delivery platform DoorDash Inc. almost doubled from their IPO price in their trading debut Wednesday, a huge pop for an unprofitable company that's had a recent boost from pandemic-era eating habits.
The stock opened at $182 after DoorDash raised $3.37 billion in its initial public offering, pricing shares at $102 each.
The massive first-day jump -- which could be the third biggest this year in an already white-hot IPO market -- gives DoorDash a fully diluted value of about $68.4 billion. That includes outstanding shares, employee stock options and restricted stock units detailed in its filings.
With a current market capitalization of about $58 billion -- excluding those additional shares -- DoorDash is bigger than companies including Kraft Heinz Co., Lululemon Athletica Inc. and Ford Motor Co.
DoorDash sold 33 million shares Tuesday for $102 each after marketing them for $90 to $95 each. Its IPO is the third-largest on a U.S. exchange this year, exceeded only by the $4 billion blank-check company backed by billionaire Bill Ackman and software maker Snowflake Inc.'s $3.86 billion offering including so-called greenshoe shares.
DoorDash has seized on the pandemic-fueled boom in demand for meals brought to your door, as well as investor exuberance over new stock listings as it moves ahead with its IPO. Revenue in the first nine months of the year more than tripled and its net loss narrowed from a year earlier on a surge in new customers, the company said in its filings.
While DoorDash was a sort of lifeline to many restaurants as pandemic lockdowns forced them into a takeout-only model, the fees that it charges restaurants, which can be 30% of the cost of an order, are seen as unfair by some eateries. Certain cities, including New York and Seattle, have set limits on the amount of fees delivery services can charge restaurants.
Before the pandemic, food-delivery companies like DoorDash and rivals Uber Eats and Grubhub Inc. struggled to make money amid fierce competition among themselves and blowback over their fees and treatment of workers. Margins in the business are razor thin, prompting a wave of consolidation last summer that saw Grubhub get bought by Just Eat Takeaway.com NV for $7.3 billion.
DoorDash's offering is being led by Goldman Sachs Group Inc. and JPMorgan Chase & Co., with Barclays Plc, Deutsche Bank AG, RBC Capital Markets and UBS Group AG also on the deal. DoorDash's shares are trading on the New York Stock Exchange under the symbol DASH.
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