Can I Buy DoorDash Stock?
The food delivery industry really hit its stride during the COVID-19 pandemic. With restaurants closed, most people learned how easy it is to have meals delivered with the click of a button. DoorDash is the industry leader in the US, owning more than 50% of the market share for food and convenience deliveries. The company itself is an American multinational brand that was founded in Palo Alto, California in 2013. Can you buy DoorDash stock?
What Is DoorDash?
DoorDash has an interesting origin story from its humble beginnings to a global brand worth nearly $40 billion.
In 2012, a group of Stanford students had created a website and mobile app for students who were getting food delivered to their dorms.
After some local businesses caught wind of it, the group, led by Tony Xu and Andy Fang, launched PaloAltoDelivery.com.
A year later, it incorporated as DoorDash and received an initial investment of $120,000 from Y Combinator. Today, Xu remains CEO of the company and Fang is the CFO. So what about DoorDash stock?
Can I Buy DoorDash Stock?
Yes! In December of 2020, DoorDash went public on the New York Stock Exchange under the ticker symbol: NYSE: DASH. The stock debuted at $175.00 per share for public traders.
It was one of the most hyped IPOs of the year, and the interest in the stock was clear from the start. Shares hit an all-time high price of $257.25 in November of 2021.
The stock has nosedived in 2022 mostly due to the ongoing correction in growth stocks. DoorDash hit an all-time low price of $74.32 in March of 2022.
Since then, shares have stabilized somewhat, although are still trading at more than 100% lower than the highs set in 2021. The stock is also a component of the Russell 1000 growth index.
DoorDash Stock Business Operations
DoorDash is a global brand although the company only officially operates in five countries: the US, Canada, Australia, Japan, and Germany. This definitely seems limited, especially compared to some of its competitors.
But DoorDash does technically operate in over 23 different countries through its various other subsidiaries. So let’s learn a bit about those!
As the name suggests, Caviar is a food delivery platform for high-end restaurants. DoorDash acquired Caviar from fintech company Block (NYSE: SQ) in 2019 for $410 million.
The move integrated Caviar’s ability to deliver meals from restaurants who don’t usually offer a delivery service. It provided DoorDash with a full spectrum of options in select US markets like San Francisco, Los Angeles, and Seattle.
In 2019, DoorDash raised some eyebrows when it acquired Scotty Labs, an autonomous driving startup. But this isn’t just any autonomous driving company.
Scotty Labs is designing technology where people can control these vehicles remotely. You don’t have to be a rocket scientist to see how DoorDash can use this type of technology. We’ve all heard the likes of Elon Musk talk about robotaxis in the future.
Perhaps future generations of DoorDash delivery drivers will be dropping off meals with a remote control from the other side of the country.
Another fun technology acquisition by DoorDash in February of 2021.
Chowbotics is a robotic salad maker that can autonomously build salads in a type of vending machine.
How DoorDash will use the Chowbotics technology remains to be seen but it could potentially be offering its own meals or menu items in the future. Chowbotics is definitely a cool idea and one that furthers the robotification of the food industry.
The Wolt acquisition was a major one and one that caught the attention of the global food industry. Wolt is a major food delivery service in Europe and Asia. It operates in 23 different countries and well over 180 different cities.
DoorDash acquired Wolt in November of 2021 in an all stock transaction which was worth $8.1 billion at the time. Of course, with the decrease in DoorDash stock, the company seems to have received a bit of a bargain at current price levels.
The Wolt integration provides DoorDash with a major foothold in Europe and immediately adds 2.5 million monthly active users to its ecosystem.
Miki Kuusi, the CEO of Wolt, will be joining DoorDash and will operate the DoorDash International segment of the company. The deal is expected to close in the second half of 2022.
DoorDash continued with its tech acquisition in 2022 by acquiring the touchless payments provider, BBOT. The company also offers digital solutions like in-store ordering and providing digital analytics for your business. DoorDash’s acquisition of BBOT will help it continue to provide digital services to help its clients maximize their businesses.
DoorDash Stock Competitors
While DoorDash owns a majority market share of the US, that doesn’t mean it is the only game in town. Far from it actually! In an industry that is seeing ongoing consolidation, there are a few major brands that stand out.
You’ve probably heard of most of these and have probably even used them in the past. Here are some of the stocks for DoorDash’s biggest competitors!
Uber (NYSE: UBER)
UberEats is the food delivery segment of the global technology company, Uber. The food delivery service was launched in 2014 and is now available in over 6,000 cities across 45 different countries.
Uber itself started out as a ride-hailing service to provide a cheaper and more available alternative to taxis. UberEats has skyrocketed in popularity and can be used to order delivery or pickup directly in store. While it trails DoorDash US market share, it more than makes up for it on a global basis.
Lyft (NASDAQ: LYFT)
Uber’s biggest competitor in terms of ride sharing is Lyft. Interestingly enough, Lyft has not developed a food delivery service like UberEats or DoorDash. What the company has done is that it allows users to request their driver pick up an order from a restaurant for an extra fee. Is it ideal?
Not really. But it is an added option that Lyft users can utilize through its platform. The problem is, most users aren’t loyal to either Lyft or Uber. If they need a meal delivered, chances are the ease of ordering it through Uber Eats or DoorDash will win out.
AliBaba (NYSE: BABA)
In China, super apps like AliPay from AliBaba and WeChat from Tencent reign supreme. These apps act as digital payment methods, so of course, the integration of food delivery was a no-brainer. Users in countries that accept WeChat and AliPay can use the apps to order food delivery as well. It also allows it to compete with China’s largest food delivery service,Meituan.
Grab (NYSE: GRAB)
Here’s an under the radar stock for investors looking for exposure to the South East Asian market. Grab went public via a SPAC merger, and has performed terribly, losing more than 75% since it debuted. But the company is a major food delivery brand in markets like Singapore, Malaysia, and Indonesia.
In fact, it services a market with nearly 1 billion people and offers plenty of different delivery services. For food, Grab actually acquired the UberEats segment in South East Asia. Uber owns a 28% stake in Grab, so the two companies are tied together. DoorDash does not operate in the region, and if it ever plans to, Grab will be one of its major competitors.
DoorDash Stock Controversies
The company has not been without controversy in its ten years of existence. Most of these allegations came in the past few years though as DoorDash has become a major global brand. Most significantly, DoorDash has been accused of monopolistic behavior with other food delivery companies like Uber and GrubHub in the US.
During the pandemic, DoorDash was also accused of withholding tips from drivers, as well as listing restaurants on its app who didn’t give them permission to do so. This is significant because it can cause restaurants to lose business if people do not order from them on the app.
It’s an unfair way of losing revenues based on user preferences and geographic location to the restaurant. This practice has actually been ruled illegal in the state of California where DoorDash is based.
Is DoorDash Stock a Good Investment?
The million dollar question. Plenty of people believed it to be a good investment when the IPO happened in December of 2020. But IPOs generally come with a lot of hype and initial overinflated prices. The company picked the best time to debut as its brand was at an all-time high during the COVID-19 pandemic. Since then, investors probably have a different opinion on the stock.
But if you are talking about the long-term, DoorDash is probably positioned to continue to do well. The company continues to make smart acquisitions to bolster its portfolio of services. Time will tell how autonomous driving and robotic meal prep will factor into the company’s plans. DoorDash is trading near all-time low levels, and even as the worst of the pandemic is seemingly behind us, food delivery is an industry that is here to stay.