In 2020, Tony Xu, the Founder and CEO of DASH, made over $413 million, mostly in the form of restricted stock units. Extreme CEO compensation (and other executives as well).The nine months ended 9/30/21 featured a loss from operations of $298 million and a net loss of $313 million or $0.94 per share.ĭespite the favorable environment, the company lost money for 2 reasons: To top it all off, DoorDash got to look like the hero by presumably helping keep the local restaurants open (a notion I will challenge later in this article).Ģ020-2021 was such an extraordinary opportunity for DoorDash with a greater than 50% share in a freshly doubled revenue stream…. In such an environment, the delivery apps have been able to insert themselves as a middle man clawing money from both customers and restaurants in exchange for connecting them. They have the ultimate captive audience with COVID restrictions and COVID fear (perhaps rational) preventing restaurants and customers from directly interacting with one another. Take a look at the sales spike for the industry in mid-2020. In addition to having a massive market share at 57%, the market into which they sell has doubled in size as a result of the pandemic. I don’t think there has ever been a more perfect environment for DoorDash. Overall, I see fair value as just a fraction of current price. a shift in public opinion on delivery apps.Overvalued stocks can stay overvalued for a long time, but there are 2 catalysts in place here to bring it back down to earth: These challenges will make it difficult for earnings to turn positive and yet DASH is trading at a $45B valuation. Hapabapa/iStock Editorial via Getty Images The Short ThesisĭoorDash ( NYSE: DASH) is a strong short sale candidate as there are numerous problems in its business model that seem to have been overlooked.
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