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Airbnb, DoorDash IPOs

DOS_patos

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Two household-name tech startups are poised to go public this week, adding to 2020’s influx of initial public offerings.

Shares of Airbnb are slated to begin trading on the Nasdaq on Dec. 10 under the ticker “ABNB.” DoorDash, which will trade on the New York Stock Exchange under the ticker “DASH,” is set to see shares start trading one day earlier.

Food delivery company DoorDash has been a beneficiary of this year’s stay-in-place orders and social distancing, as customers increasingly turned to digital food delivery services. DoorDash’s latest operating results for 2020 have reflected that boom in demand: Revenue during the first nine months of this year more than tripled over the same period last year to $1.9 billion. And over the same time frame, its net loss narrowed to $149 million, down significantly from $533 million in 2019.

In a testament to heightened demand for its public offering, the San Francisco-based company boosted its IPO fundraising goal on Friday to as much as $3.1 billion, up from its previous high-end goal of $2.8 billion. According to the filing, it will market 33 million shares for between $90 to $95 apiece, up from its previous range of $75 to $85 per share. At the high end, this suggests DoorDash will have a fully diluted valuation of more than $35 billion.

Still, the company faces stiff competition from an array of other players in the food delivery space, though it remains the leader domestically for now. DoorDash gobbled up the most U.S. market share in April of this year during the height of stay-in-place orders, enjoying a lead of nearly 20 percentage points ahead of UberEats (UBER), according to data from EdisonTrends. The latter has since completed an acquisition of rival delivery company Postmates to try and bridge the gap in market share.


Airbnb, on the other hand, has seen business slide this year as the pandemic decimated travel demand.

The home-rental software platform saw revenue drop 32% to $2.5 billion during the first nine months of this year versus 2019, though its top line decline improved to 18% in the third quarter specifically. Like DoorDash, the company remains unprofitable, and its net losses more than doubled to $697 million for the first nine months of this year.

The company had been growing strongly leading up to 2020, and its revenue jumped by more than 30% in fiscal 2019. However, it hinted at an uncertain post-virus future in its prospectus, noting that, “Even after shelter-in-place orders and travel advisories are lifted, demand for our offerings, particularly those related to cross-border travel, may remain depressed for a significant length of time, and we cannot predict if and when demand will return to pre-COVID-19 levels.”

Airbnb said in a filing last week that it planned to offer 51.9 million shares in its initial public offering at between $44 to $50 apiece. This would mean the IPO would raise about $2.6 billion on the high end, and give the company a fully diluted valuation of about $35 billion.
 
I got grub hub at the beginning of this corona stuff but Doordash could be next with the way this pandemic is playing out. I could justify buying Airbnb now while it’s low because I think after this people are gonna be traveling all over on some yolo stuff. Now the question is will AirBNB survive that long?
 
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I was watching Yahoo finance this morning and man........ the info they put out about door dash has me not wanting to mess with it at all. They said that even with everyone ordering food during the pandemic that company is still losing a ton of money!

Like, how could they be losing a ton of money when damn near everyone in this country is this country has been using their services for the last 5+ months?!
They've cut into that significantly, but wow!!
 
I was watching Yahoo finance this morning and man........ the info they put out about door dash has me not wanting to mess with it at all. They said that even with everyone ordering food during the pandemic that company is still losing a ton of money!

Like, how could they be losing a ton of money when damn near everyone in this country is this country has been using their services for the last 5+ months?!
They've cut into that significantly, but wow!!
Same I just read this article too


DoorDash's initial public offering "holds no value," and the company may never be profitable, said David Trainer, the CEO and founder of New Constructs.

The food-delivery startup upped its IPO price range to $90 to $95 a share in a filing on Friday after initially targeting $75 to $85. The new target means DoorDash is now seeking to raise as much as $3.1 billion in its public debut on Tuesday.

It could be one of the largest US tech IPOs of the year, though Trainer branded it "the most ridiculous IPO of 2020."

The veteran Wall Street analyst said that DoorDash's last private valuation was only $16 billion and that its pre-IPO stage reflected the "overblown fervor of the work-from-home theme."





"We think this proposed public equity offering holds no value, $0, beyond bailing out private investors before unsuspecting public investors realize the business is not viable in its current form," he said in an email.

Read more: Market wizard Chris Camillo grew his trading account by $9.7 million in 2020. Here's the simple strategy he's using to mint millions.

Trainer added that the company would need to grow its share of the competitive global food-delivery app market to over 56% from roughly 16% over the trailing 12 months to justify its valuation.

DoorDash's revenue grew by 268% year-over-year in the third quarter of 2020, but Trainer cautioned investors against expecting further growth, especially if a swiftly deployed coronavirus vaccine sends people back into restaurants.

"It took a global pandemic to drive the firm's one quarter (ended June 30, 2020) of GAAP profitability. The firm has not been profitable since, and we think it may never be," he said.





Read more: Goldman Sachs says buy these 19 beaten-down stocks on its 'holiday shopping list' that are poised to break out in the 1st quarter of 2021

"Investors should take DoorDash's GAAP numbers with a grain of salt," Trainer added. "The company disclosed a material weakness in its internal control over financial reporting in its S-1. This disclosure means DoorDash didn't have adequate technology and processes in place to ensure the accuracy of its financial statements and increases the odds that DoorDash will need to restate its financials in the future."

Trainer also pointed out that DoorDash publicly filed for its IPO on November 13, a few days after Pfizer announced its vaccine was found to be over 90% effective at preventing COVID-19.

"We think DoorDash's current investors and bankers recognize that the window of opportunity to IPO this terrible business closes quickly when the threat of COVID-driven lockdowns no longer drives growth in food delivery demand," the analyst said.

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