Every tech entrepreneur dreams of the days where their company will reach its initial public offering (IPO). The dream has become a reality for DoorDash who today will launch its official IPO priced at $102 per share. According to economic analyst, the food delivery company is valued at over $39 billion. The company reached its IPO debut quickly as the company is only seven years old.
Last month DoorDash projected that its stock would debut at $90 or $95 per share. However, due to the increase in the amount of investment within the firm, the company was able to raise stock value that is more favorable for them. DoorDash will trade on the New York Stock Exchange under the title DASH.
Similar to Facebook and other tech companies, DoorDash was founded in a dorm room at Stanford University in 2013 by CEO Tony Xu. Throughout the company’s history it has provided more than 900 million orders. The company has a workforce of 1 million delivery drivers.
DoorDash was successful before the coronavirus pandemic. Each year it was growing in revenue by hundreds of millions of dollars. However, since the global pandemic has kept many people at home, DoorDash discovered a sanitary way to provide its services, which caused them to generate millions since the spread of COVID-19. DoorDash now has 50% of the food delivery market.
Another popular company, Airbnb, will be making its initial public offering on Thursday. According to analyst, the home rental company has been severely affected by the pandemic and they expect their debut to start at a lower price than it typically would.
“I want you to own Airbnb because it’s set to have a terrific year starting next March,” said CNBC’s Jim Kramer. “That means you’ve got a few months to make your move, no rush.”
Business leaders at Airbnb have been discussing for months the most appropriate time to debut its IPO. Some representatives wanted the IPO to launch sometime in 2021, where the economy may be stronger due to the availability of COVID-19 vaccines. The company ultimately decided that the fourth quarter of 2020 would be a good time to launch and they are expecting a positive result. As the U.S. grows closer to containing COVID-19, representatives at Airbnb are expecting the service to grow significantly once people start to feel more comfortable with traveling, vacationing and staying at rental property.
Airbnb stock will be priced between $56 and $60 per share. “If you can get the stock for $68 or less this week, I’d back up the truck. If you can get it for less than $85, I’m granting you a small position,” Cramer added. “Any higher ,though, and I’m going to have to say you’ve got to keep your bat on your shoulder and wait for a better pitch.”
Airbnb is expected to have a low first quarter of 2021, but then a significant increase in quarter two. Even though there has been a 30% decline in revenue in the last year from Airbnb, the company remains optimistic about the IPO and its market share in 2021.