Dear Reader,
DoorDash Inc., the food delivery business, listed yesterday on the New York Stock Exchange at 55.59 billion USD valuation.
According to DoorDash's IPO prospectus, in the 2019 calendar year the company achieved 885 million USD in revenue and 1.9 billion USD revenue up until September 30, 2020.
In my humble opinion, the real intrinsic value of DoorDash is around 25 billion USD. The company incurred a net loss of 668 million in 2019. DoorDash seems to be a discounter business which will find it very difficult to turn a net profit.
Yes, during the coronavirus pandemic lockdown, DoorDash's business seems prosperous, but the coronavirus pandemic will someday be over and the growth prospects of DoorDash will not be so bright then. What is more, DoorDash's sector of business is very competitive and basically the only way to compete is on price, which limits future profit possibilities.
Hot money is chasing a small number of listed stocks and even a smaller number of listed technology stocks, which has created a bubble. We are living amidst the greatest financial bubble in terms of USD amount in history. Technology stocks, bonds, real estate are all overvalued. When the bubble bursts, it will be triggered by a crash in technology stocks, which will bring problems in real estate, corporate bankruptcies, banks will record huge bad credit losses. Then banks will turn off the monetary liquidity spigots and we will have a crisis similar to the Great Recession in 2008-2009, but it will be deeper.
And it has all to do with money printing of central banks driven by politicians' desires to stay in power. Human nature rarely changes.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
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