This is the kind of financial analysis that catches the reader’s attention : “DoorDash: the most ridiculous IPO of 2020”. And to burn down the valuation of the company, which, according to David Trainer, analyst published by Seeking Alpha, would not have more sense than the introduction “The most ridiculous” of 2019, that of WeWork, the office-sharing company that didn’t even need the Covid to explode in flight. There, DoorDash, the home food delivery company, is decked out with all flaws: proposed at the top of the cycle, because the planet will come out of containment and home delivery lose its appeal; no profits in the third quarter, little ability to increase them in a sector that would be very competitive; and governance that gives few rights to shareholders.
Laughter who laughs last, the listing of the San Francisco firm on the New York Stock Exchange (NYSE) was a triumph, Wednesday, December 9: sold for $ 102, the stock immediately soared 80%, listing $ 182 at the opening, valuing the company at around $ 70 billion (€ 58 billion). This is more than the range of 90-95 dollars initially envisaged and especially 4.7 times the valuation carried out at the beginning of the year. The company took the opportunity to raise $ 3.4 billion in new money.
Buy!
So goes the market euphoria on Wall Street: you are a company “Stay at home”, who benefited from Covid-19: buy! You are a company shattered by the Covid but which will bounce back with the vaccine, like Airbnb, a specialist in rentals between individuals, whose IPO was to take place on Thursday, December 10, buy also. Usually, the end of the year is not conducive to IPOs, but, in this year 2020, the party will last until New Year’s Eve. At least Wall Street has rediscovered its purpose: to finance companies, and not to let them devour themselves by buying back their own shares. The capital raised since the beginning of the year by IPOs has exceeded 140 billion dollars, largely beating the last record set in 1999, before the bursting of the Internet bubble. According to the Stock Analysis site, 424 companies had listed on December 8, nearly twice as many as the previous year.
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