Shares of food delivery platform DoorDash (NYSE:DASH) surged 92% in their initial public offering (IPO).
DoorDash, which has ramped up home delivery of food during the pandemic, saw its shares climb as high as $195.50 U.S. per share in New York trading after raising $3.37 billion U.S. in its IPO.
The first-day jump, the third biggest this year for an IPO, gives DoorDash a market capitalization of $60 billion U.S. and a fully-diluted value of $71.3 billion U.S. — higher than companies including Kraft Heinz (NASDAQ:KHC), Lululemon Athletica (NASDAQ:LULU) and the Ford Motor Company (NYSE:F).
Investors looked past concerns that competition from rivals such as Uber may heat up next year, just as the distribution of vaccines reduces the need for at-home dining. The successful IPO of DoorDash, which remains unprofitable, bodes well for companies such as Airbnb Inc. that are looking to add to the more than $160 billion U.S. already raised by IPOs in 2020.
DoorDash’s shares opened at $182 U.S. after the company priced them at $102 U.S. each. They closed at $189.51 U.S., almost 86% higher than the listing price.
DoorDash’s IPO is the third-largest on a U.S. exchange this year, exceeded only by the $4 billion U.S. blank-check company backed by billionaire Bill Ackman and software maker Snowflake Inc.’s $3.86 billion U.S. offering.
DoorDash had 50% U.S. market share as of October, up from 17% in January 2018. DoorDash’s revenue in the first nine months of the year more than tripled and its net loss narrowed from a year earlier on a surge in new customers, the company said in its IPO filing.