Food delivery company DoorDash debuted on the NYSE last week and unfortunately suffered a rough decline right afterward. This wasn’t helped by Citron Research, who referred to their initial public offering as the “most ridiculous” one that year. Citron also believed that they had immensely overvalued themselves.
According to Citron, DoorDash shares should be valued at $40 each; a 74% decline from Thursday’s closing price of $154.21. Despite this alleged inaccurate valuation, DoorDash stocks have managed to climb by an impressive 51% margin since their NYSE debut.
Some of the many reasons cited for why DoorDash’s valuation was inaccurate had to do with steep competition in the current economic climate and a lack of brand loyalty from its customers.
In addition, close competitors such as Grubhub Inc. and Uber Technologies Inc. are valued at between three and six times sales, a significantly lower margin than that of DoorDash.
In a bid to expand its revenue stream, DoorDash is now looking to deliver goods beyond restaurant meals. Some items that it’s considering delivering in addition to its current offering includes grocery store items such as toilet paper and other everyday items.
