Wall Street seems to have regained its strength, especially as regards IPOs, with Silicon Valley darlings Airbnb and DoorDash leading the pack for their highly anticipated debuts.
According to its latest filing with the Securities and Exchange Commission, DoorDash is looking to price its IPO between $75 and $85, with an expected outstanding share of over 317 million. Consequently, DoorDash would be valued at $27 billion at the high end of that range, a substantial increase from the last valuation of $16 billion when the delivery service raised money in the private markets.
DoorDash is expected to attract the intense interest of investors, being one of the big players in the food delivery business, alongside the likes of Uber (UBER) and Grubhub, which was acquired recently by Netherlands-based Just Eat Takeaway.com.
Airbnb will be another closely monitored stock as investors lookout for the recovery of the hospitality industry after being strongly hit by the Covid-19 pandemic. The company was initially valued at $18 billion earlier in 2020, a massive pullback from its $31 billion valuation before the crisis.
IPOs, especially the tech IPOs have found their way back into the market in grand style, with software firms Snowflake, JFrog, Sumo Logic and Unity already enjoying stellar debuts this year.
“It is amazing how quickly the traditional IPO market came back,” said Frank Lopez, co-head of the global securities and capital markets practice at law firm Paul Hastings. “It’s actually now a better market than we’ve seen in a long time.“
The IPO revival has been phenomenal, to say the least. Uber and rival Lyft (LYFT) went public with much fanfare in 2019. However, their stocks flopped shortly after their initial public offerings.
“Last year, we had the Wework debacle and a hangover from Uber and Lyft. But IPO investors are once again screaming with enthusiasm,” said James Gellert, CEO of research firm RapidRatings.
Gellert also stated that DoorDash, which has posted strong revenue growth, looks to be a more attractive buy than Airbnb, despite both companies still losing money. However, these developments might not dissuade investors, considering that Uber stock has recovered from its pandemic lows despite the company failing to make profits.
It is worth noting that DoorDash and Airbnb are not the only unicorns expected to test the public markets before the end of the year, as more startups consider launching IPOs before the New Year.
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