DoorDash has put a price tag on its upcoming initial public offering (IPO). In a regulatory document filed on Monday, the grocery- and restaurant-delivery service wrote that its common stock will be sold in the IPO for $75 to $85 per share.
All told, the company is floating 33 million shares in the issue, potentially bringing in over $2.8 billion in gross proceeds.
To no one’s surprise, the company has seen dramatic growth in its services during the coronavirus pandemic, which has kept consumers at home due to voluntary or mandated stay-in-place regulations. All told, from January to September, DoorDash managed to grow its revenue by a very robust 226%. While it is unprofitable, those nine-month results show that it has also managed to trim its bottom-line loss considerably.
Unlike numerous other newly listed companies recently, DoorDash is selling its shares in a traditional IPO. This is in contrast to using a special purpose acquisition company (SPAC), in which a shell company is formed to draw funds, and an existing business is backed into that company. DoorDash is going public with the backing of a big syndicate of underwriters led by Goldman Sachs and JPMorgan Chase unit J.P. Morgan.
The stakes have risen considerably in the food delivery space. In June, Grubhub (NYSE: GRUB) agreed to be swallowed by Europe’s Just Eat Takeaway (OTC: TKAY.Y) in a gut-busting $7.3 billion deal. Weeks later, Uber Technologies (NYSE: UBER) agreed to buy Postmates for a comparatively modest $2.65 billion to add sauce to its Uber Eats operation.
The fortunes of DoorDash’s rivals were mixed on its news. Grubhub inched up by 0.4% on Monday, against the 0.5% decline of the S&P 500 index, while Uber fell by 2.1%.
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