(Yahoo Finance) – Food delivery giant DoorDash has made its IPO filing public and will debut in the New York Stock Exchange. Yahoo Finance’s Myles Udland, Julie Hyman, and Brian Sozzi discus on Yahoo Finance Live
JULIE HYMAN: Well even as we get those COVID headlines, as I mentioned, futures are indicating a higher open, the markets continuing to rise. And that also means a number of companies want to strike while the iron is hot and go public. One of them is DoorDash.
It’s out with an S-1 this morning. We have all been poring through it, because it just came out moments ago. Myles Udland, I know that you’ve been looking at. I mean, and a S-1 is long, to be clear. But on your first glance here, what sticks out to you?
MYLES UDLAND: Yeah. Well let’s just do the top line numbers. So I think these are all going to get a lot of play throughout the day. For the nine months ending September 30, DoorDash’s revenues and 2020, $1.92 billion. That compares to $587 million for the same period last year.
So revenues through the first nine months of the year have more than tripled from last year. If you look at the loss per share, that’s also narrowed. So $3.34 would be the loss per share for the first three months of this year. That compares to $12.41 per share last year.
To do the millions on this, 149 million in losses the first nine months of this year, 534 last year. And there’s also a chart in here of the competitive dynamics between DoorDash, Seamless, some of the other major competitors, Uber Eats as well. And it goes back and it shows in 2018 the share that DoorDash had in the market.
It was quite small. And when we fast forward to 2020, all of a sudden DoorDash has about 50% of the market. And we’ve all gotten the promotions in our inbox many times. We know the amount of work these companies are doing to get them to be a regular part of our routines.
But for a company to go from 17% market share back in January of ’18, to 50% as of October 2020, really shows the share gains that DoorDash has made. I think maybe investors are going to have concerns about how they’ve subsidized a lot of those customers to get on the platform. We know that Seamless has had its own struggles.
Uber Eats has been very promotional. So there’s a lot of crazy dynamics going on here, is how one VC once described it to me. And consolidation would seem inevitable. But, Brian Sozzi, DoorDash is definitely a company that investors have wanted to get a closer look at. And I’ll be very interested to see what the reception is like once they come public and we can start to really find a steady price on this thing.
BRIAN SOZZI: Myles, one number that stood out to me in this really long S-1, with some great food photos, $1.6 billion. That’s how much cash DoorDash has right now pre-IPO. They’re going to exit their IPO with probably, well over $2 billion in cash.
That is a lot of cash to fuel ambitions beyond delivering just food. And buried in this S-1, they highlight that. I will add this too, just on your point on the market reception. You’re going to have a lot of investors approach this IPO and all they’re going to see is something like a Grubhub.
Keep in mind, in June Grubhub sold out to Just Eat. And I think they’re going to see a lot of folks say, you know what, why not bet now on a DoorDash potentially selling out to a larger company down the road?
JULIE HYMAN: Yeah. Sozzi, I just want to make two points before we move on. One of them is that this IPO, like many of the other IPOs that we’ve seen recently, has multiple classes of stock, which hasn’t seemed to put off investors into other new IPOs. But there are three classes of stock, A, B and C. And the B, common stock, is that that’s going to be held by the co-founders and executives.
And speaking of the co-founders, Tony Shu has a pretty extensive letter here in this S-1. He’s the founder of the company. He highlights that his parents came as immigrants to the United States.
He also talks about– when you talk about differentiation here, Grubhub and Seamless have been criticized by some of their clients, that is restaurants, in terms of their pricing model. And it’s interesting that this S-1, DoorDash takes pains to say that they’re here to build small businesses and support the economy, which is kind of an interesting take.
I didn’t look at those other companies’ S-1s when they came out, to see if they made similar comments. But it is interesting that they’re painting themselves in that light.