DoorDash Sets IPO Price at $102 a Share, Above Previously Raised Range: Report

DoorDash pricing reflects hot market for new issues with strong technology components, but post-pandemic path is uncertain for delivery service.
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DoorDash Inc.  (DASH) - Get Report priced its IPO at $102 a share Tuesday night, above an already raised range as the hot market for initial public offerings continued.

At that price, the company’s fully diluted valuation is $38.7 billion CNBC reported.

DoorDash had previously boosted the price target for its planned IPO on Friday as the biggest U.S. food delivery group looks to raise more than $3 billion from its listing on the New York Stock Exchange.

The pricing comes amid a slew of late-year IPOs cashing in on surging markets and demand for high-growth potential names on Wall Street.

DoorDash offers delivery services, primarily food delivery, and receives a cut on each transaction from restaurants as well as customers placing the order.

The company said in an amended S-1 filing last week that it was planning to price 33 million shares.

Jim Cramer told his Mad Money audience on Monday there's a lot to like about the DoorDash story. The company has both market share and growth, he said, and even though it is still investing for growth and losing tons of money, its margins are moving in the right direction.

The big elephant in the room, however, is whether DoorDash's revenues are sustainable once the pandemic ends. That means the stock's valuation becomes critically important, Cramer said.

At the midpoint of the previously expected IPO range, DoorDash had been valued at seven times sales, which is cheap if the growth is maintained Cramer argued. However, Cramer urged investors to be cautious, and only invest if they can get shares below $100.