DoorDash CEO Tony Xu is looking to take his company public. Business experts think the food delivery service could be in for a touch reception from Wall Street.This story is available exclusively on Business Insider Prime.DoorDash, which this week confidentially filed its public-offering paperwork, could face a poor reception from Wall Street, business experts told Business Insider.
Meanwhile, Coronavirus-related turmoil in the stock markets and the potential for an economic downturn could further dampen interest in DoorDash's shares.DoorDash isn't WeWork or Uber. But it shouldn't expect a much better reception from Wall Street than those companies received, business experts warn.
Lyft, Uber's archrival, had a similar experience. Peloton, Slack, and Pinterest have also struggled to stay above their IPO prices. What all of those companies have in common is that they've been posting big losses despite, in many cases, being in business for many years. While public investors in the past have been willing to put up with such losses for the promise of strong revenue growth, that's no longer the case, the experts said.
Uber CEO Dara Khosrowshahi has struggled to improve the bottom line of the company's Uber Eats business.Meanwhile, GrubHub saw its bottom line swing from a $78 million profit in 2018 to an $18.5 million loss in 2019. Previously, GrubHub had largely served as an intermediator between customers and restaurant partners, helping to direct delivery orders to establishments that already had delivery drivers of their own.
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