WSJ US BusinessDoorDash Prices IPO Above Expected Range

December 9, 20200

DoorDash’s ability to make inroads in local markets including Brooklyn, N.Y., as seen last week, has impressed investors.

Photo: Michael M. Santiago/Getty Images

DoorDash Inc. priced shares in its initial public offering at about $102 apiece, according to people familiar with the matter, a sign of strength both for the meal-delivery company and the overall IPO market.

The price equates to roughly $39 billion using a fully diluted share count and including proceeds from the offering, which raised $3.37 billion. It is above the $90 to $95 a share range the San Francisco company had been targeting after boosting initial expectations it established last week.


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The $102 IPO price caps a stunning run-up in the company’s valuation and marks the latest sign of euphoria in the IPO market. Earlier this year, DoorDash was privately valued at more than $15 billion, up from $1.4 billion in 2018.

Fueled by a surging stock market and the stellar performance of recent technology listings, the IPO market has already set a record. So far in 2020, more than $140 billion has been raised on U.S. exchanges, far exceeding the previous full-year record set at the height of the dot-com boom in 1999, according to Dealogic data that date to 1995.

Since DoorDash’s roadshow began last week, investors have shown strong interest in the offering, prompting the company to boost the price range from an initial $75 to $85 a share.

Investors have been excited by the company’s strong growth as consumers move away from dining in restaurants during the Covid-19 pandemic and by its ability to conquer local markets quickly and show profits. In the quarter ended in June, DoorDash posted a profit of $23 million on $675 million in revenue, though it reverted to a net loss the next quarter even as revenue jumped to $879 million.

This week is shaping up to be one of the biggest of the year for the new-issue market. A day after DoorDash’s debut, Airbnb Inc. is set to begin trading. The San Francisco home-sharing company would be valued at $42 billion at the high end of its also-boosted price range.

Ghost kitchens are popping up all over the U.S. as food delivery soars and dining at restaurants plummets in the midst of the pandemic. These businesses, which can host food preparation for multiple restaurants at a single location, are attracting interest from investors and restaurateurs. Photo: Adam Falk/The Wall Street Journal

December is typically a quiet time in the IPO market. This year there will instead be a flurry of offerings as the pandemic turns the calendar on its head. In addition to Airbnb and DoorDash, videogame company Roblox Corp. and the parent of online retailer Wish, ContextLogic Inc., are expected to make their debuts before the year is through.

Both DoorDash and Airbnb are using novel models for pricing their IPOs following virtual roadshows occasioned by the coronavirus pandemic.

The companies each asked investors to input stock orders through a computerized system in which they outline the number of shares they are seeking and at what price. Investors have the option to indicate how much they are willing to buy at various price points.

This approach differs from a traditional IPO, in which underwriters typically confer directly with potential investors and play a greater role in setting the price.

Under the new auction system, DoorDash and Airbnb executives will see the same information as their respective bankers and are expected to play a more significant role in choosing investors and setting the price.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading DoorDash’s IPO, while Morgan Stanley and Goldman are leading Airbnb’s. DoorDash shares are set to begin trading on the New York Stock Exchange under the ticker DASH.

Write to Maureen Farrell at

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Appeared in the December 9, 2020, print edition as ‘DoorDash Prices IPO Above Range.’

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