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DoorDash (DASH) down 7% after soaring on public debut
DoorDash (DASH) was trading 7% lower on Thursday just 24 hours after the food delivery service made waves with an initial public offering (IPO) that soared 86% above its starting price.
DoorDash went into the sale with shares of common stock at a predicted range of $90 to $95 and eventually sold 33m at a $102 price on Tuesday evening.
The San Francisco-based company’s market debut in midweek ended up being particularly eventful as shares soared amid stronger-than-anticipated demand from investors.
After a session of gains, DASH eventually closed 86% up at $189.51, though that did dip to $182 in after-hours trading.
This was still enough to create a market cap of $57.8bn, a figure that was far ahead of the $28bn valuation set after the company announced its intentions to go public last month.
Chief executive Tony Xu said that the turn of events was “certainly surreal” and admitted that it was not able to issue enough shares to satiate demand.
The hype for DoorDash has been fuelled by its rising revenue and market share in the food delivery industry.
A recent filing claimed that revenue increased by 268% in Q3, while its total order value commanded 50% of the delivery market in the US in October.
Everything hasn’t been plain sailing though as some restaurant groups have taken issue with DoorDash’s commission rates.
Its most recent full year of operations also showed a $667m net loss, though the company did rebound to a $23m profit in Q2.
After a headline debut, there was a slight comedown on Thursday as DoorDash shares tumbled 7.08% on the New York Stock Exchange to $176.70.
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