DoorDash stock takes off as IPO price starts trading at $182 per share – CNET

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DoorDash, the biggest US food delivery company, began trading on Wall Street on Wednesday.

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DoorDash saw its share price skyrocket by 78% after it rang the opening bell for the New York Stock Exchange on Wednesday with its Wall Street debut. The company's shares started trading at $182 apiece, far higher than the $102 initial public offering price it set on Tuesday evening. And much more than the $75 to $85 target range it initially set last month.

Earlier this year, DoorDash was privately valued at about $16 billion. Now, as a publicly traded company, its valuation is around $57.8 billion, according to CNBC. While the company is not yet profitable, investors say its massive growth shows promise. In filings with the US Securities and Exchange Commission last month, DoorDash reported revenue gains, decreases in losses and a rising supply of customers, merchants and delivery workers.

"If we can make possible the delivery of ice cream before it melts, or pizza before it gets cold, or groceries in an hour, we can make the on-demand delivery of anything within a city a reality," DoorDash CEO and co-founder Tony Xu wrote in a letter included with the filing.

The past few months have been booming for DoorDash, as the coronavirus has caused people around the world to shelter-in-place and stay indoors. The San Francisco-based company, founded in 2013, has gained millions of customers who avoid going to restaurants and instead order their meals through the platform. Taking advantage of this timing, DoorDash has expanded from just restaurant deliveries to grocery, pet store and convenience store deliveries too.

DoorDash says it now has more than 18 million customers, partners with more than 390,000 merchants and has more than 1 million delivery workers on its platform.

DoorDash's business isn't without risk, however. In its federal filing, the company said it faces fierce competition from companies like Uber and Grubhub. DoorDash also said its operations could be hurt if its delivery workers -- or Dashers, as the company calls them -- are reclassified as employees. That would mean it'd be beholden to payroll and benefits costs, as well as any discrimination claims or employee benefit claims that may arise. 

Another risk factor to its business, DoorDash said in the filing, is its ability to "cost-effectively attract and retain Dashers." The company added that "negative perception of our platform or company may harm our reputation, brand, and local network effects." Last month, the company settled a lawsuit for $2.5 million with the attorney general of Washington, DC, over allegedly deceptive business practices where it withheld tips from delivery workers.

"We're pleased to have this issue behind us," a DoorDash spokeswoman told CNET at the time.

DoorDash began trading on the New York Stock Exchange on Wednesday under the symbol DASH. Goldman Sachs and JPMorgan Chase led the IPO.

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