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DASH - DoorDash


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I think with DoorDash you will end up with one of two very polarizing outcomes.  One is they end up not ever making money and the company ends up not really working out.  The second is people really want things (other than food quickly) and are willing to pay a premium and merchants want their goods delivered within the hour (not the day) and this turns into the next Amazon (slim chance). 

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I think with DoorDash you will end up with one of two very polarizing outcomes.  One is they end up not ever making money and the company ends up not really working out.  The second is people really want things (other than food quickly) and are willing to pay a premium and merchants want their goods delivered within the hour (not the day) and this turns into the next Amazon (slim chance).

 

Definitely agree on the "slim chance."  I do not see how this would have any durable moat of any kind against UberEats, Grubhub, or any other delivery option available.  The company has failed to deliver a profit during a pandemic shutdown, which should have been an ideal opportunity.  They raised capital at a valuation of $16 billion, yet today the market cap is still above $50 billion even after the recent drop.  I have a fairly small short position and plan to hold at least through the end of the first insider lockup period which is 3/9... should be interesting and I'll have the popcorn ready. 

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I think with DoorDash you will end up with one of two very polarizing outcomes.  One is they end up not ever making money and the company ends up not really working out.  The second is people really want things (other than food quickly) and are willing to pay a premium and merchants want their goods delivered within the hour (not the day) and this turns into the next Amazon (slim chance).

 

Definitely agree on the "slim chance."  I do not see how this would have any durable moat of any kind against UberEats, Grubhub, or any other delivery option available.  The company has failed to deliver a profit during a pandemic shutdown, which should have been an ideal opportunity.  They raised capital at a valuation of $16 billion, yet today the market cap is still above $50 billion even after the recent drop.  I have a fairly small short position and plan to hold at least through the end of the first insider lockup period which is 3/9... should be interesting and I'll have the popcorn ready.

 

I would just say that 2-3 years ago DoorDash had very little market share even in food delivery.  Right now, DoorDash is #1 in convenience delivery as well.  If expansion into the new verticals mentioned on the call yesterday work out I think there's a chance (albeit slim) that DoorDash works out well.  No position and still agree that valuation is crazy.

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I think with DoorDash you will end up with one of two very polarizing outcomes.  One is they end up not ever making money and the company ends up not really working out.  The second is people really want things (other than food quickly) and are willing to pay a premium and merchants want their goods delivered within the hour (not the day) and this turns into the next Amazon (slim chance).

 

Definitely agree on the "slim chance."  I do not see how this would have any durable moat of any kind against UberEats, Grubhub, or any other delivery option available.  The company has failed to deliver a profit during a pandemic shutdown, which should have been an ideal opportunity.  They raised capital at a valuation of $16 billion, yet today the market cap is still above $50 billion even after the recent drop.  I have a fairly small short position and plan to hold at least through the end of the first insider lockup period which is 3/9... should be interesting and I'll have the popcorn ready.

 

Their supposed moat is that if they dominate the market, their drivers can make multiple local deliveries in one trip, whereas competitors with sparser customers would need a separate trip for each delivery or two, adding to labor costs.  But that seems...rather permeable.

 

The biggest issue seems to be that, like Uber, they need to charge substantially more than now to be profitable, while their customers are likely price sensitive in choosing delivery vs not.

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