DASH, Just Another Money-losing Unicorn?

Posted on December 4, 2020 by Scott Shuda

With the latest S-1 filed, DoorDash is aiming for a price range of $75-$85, which could give the firm a valuation of $23.8 billion to $27.0 billion ($25.4 billion midpoint). Such a valuation would be well above the firm’s last private valuation of $16 billion. This MarketWatch article asks:

Is it a coincidence that DoorDash filed for its IPO so soon after vaccines for COVID-19 were announced? 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.

Breakout Investor members are following the DASH story with great interest – primarily due to a common holding in the much-smaller and already public delivery company, Waitr Holdings (WTRH). (Disclosure: I am a shareholder and sold in the money puts today.)

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The hope of many of us in Waitr is that the company will be acquired by one of the industry-leaders (GRUB, UBER OR DASH) as part of an industry consolidation. Seeing the strong IPO and pricing, and the large cash balance DASH is likely to have post IPO, WTRH is continuing its 2020 trendline higher.

The current market cap is $387 million, or just less than 2x ttm revenue. Waitr’s CEO has repeatedly stated that he plans to sell the company. Read more on the Breakout Investor Platform (links to come).

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Florian Buschek

CEO Carl Grimstad also gets a bonus if the company is sold for more than $2 per share.

Florian Buschek

The bonus is $5 million provided the Corporate Change occurs on or before January 3, 2022.

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