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DoorDash sparks investor feeding frenzy as stock closes up 85% in debut

After pricing its shares at $102 apiece, it ended up closing at $189.

DoorDash

As part of the IPO process, DoorDash had tried to exert a little bit more control over the pricing by running a hybrid auction process.

Photo: DoorDash

Investors clearly showed an appetite for DoorDash shares as the food delivery company started trading on the NYSE on Wednesday.


After pricing its shares at $102 apiece on Tuesday, the stock began trading at $182, a giant pop for the company. It ended up closing at $189, up 85% for the day.

On the heels of the large pop, DoorDash CFO Prabir Adarkar said he was "humbled by the excitement the investor community is expressing" in the food delivery business.

"The way today is different than yesterday is that, starting today, investors determine the value of our company," Adarkar told Protocol. "You can question it, I can question it, but as a matter, investors ultimately decide it. At DoorDash we like to focus on the things you can control, and for me, that means to support our merchants, our Dashers and our consumers. Over the long run, the stock price will take care of itself."

As part of the IPO process, though, DoorDash had tried to exert a little bit more control over the pricing by running a hybrid auction process, similar to what Unity did earlier this fall.

The traditional IPO process has drawn a lot of criticism in recent years from Silicon Valley's investor community for leaving so-called "money on the table" with "mispriced" IPOs that result in huge pops. While some companies have experimented with direct listings, or even gone the nontraditional SPAC route, DoorDash and Airbnb both went for the auction model where buyers can submit orders for the price and number of shares that they're ordering to give a little bit more insight and visibility for pricing the IPO.

But Adarkar shrugged off any concern that DoorDash had left any money on the table thanks to its first day gains. "We're comfortable with how we priced the stock," he said. "Remember that there's data that's available in terms of the orders that are being placed, whereas the trading price sometimes reflects consumer demand that is perhaps for a smaller number of shares than what the company has decided to sell in its IPO. You or I could go into Robinhood and buy one share for whatever price it's at now, but it's a very different proposition than selling 33 million shares."

So far, investors have bought into DoorDash's business, despite remaining unprofitable and in a highly competitive market. This year, DoorDash emerged as the clear market leader, despite a number of well-funded competitors.

When it launched in 2013, rivals like Postmates, Caviar and Grubhub already existed and had raised funding. But the last year saw some consolidation in the market, with Just Eat Takeaway acquiring Grubhub in June and Postmates selling to Uber Eats in July. DoorDash even bought Caviar from its parent company, Square, in August 2019.

"The names may change, but make no mistake that this has been a fiercely competitive market from the beginning. DoorDash, from a management perspective, has historically had much less cash than competitors, and so we had to build a better product and offer the consumer the widest selection of restaurants possible," Adarkar said. "So while going public is an important milestone, we can't let it distract us from the core strategy that has enabled us to be successful up until this point."

The next test for DoorDash will be whether its business can keep the momentum going after the pandemic, or if it will be lumped into the "stay at home stock" category with companies like Peloton that have seen a boon in sales thanks to pandemic, but whose sticking power could be questioned once a vaccine rolls out. Adarkar isn't worried and firmly believes that this is not the peak of DoorDash, but the next point in its growth story.

"Food is only about 10% penetrated, which is much lower compared to other categories like ecommerce or online travel," he said. "So I view this as a point in time in a much longer journey."

Protocol | Policy

5 things to know about FCC nominee Gigi Sohn

The veteran of some of the earliest tech policy fights is a longtime consumer champion and net-neutrality advocate.

Gigi Sohn, who President Joe Biden nominated to serve on the FCC, is a longtime net-neutrality advocate.

Photo: Alex Wong/Getty Images

President Joe Biden on Tuesday nominated Gigi Sohn to serve as a Federal Communications Commissioner, teeing up a Democratic majority at the agency that oversees broadband issues after months of delay.

Like Lina Khan, who Biden picked in June to head up the Federal Trade Commission, Sohn is a progressive favorite. And if confirmed, she'll take up a position in an agency trying to pull policy levers on net neutrality, privacy and broadband access even as Congress is stalled.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

If you've ever tried to pick up a new fitness routine like running, chances are you may have fallen into the "motivation vs. habit" trap once or twice. You go for a run when the sun is shining, only to quickly fall off the wagon when the weather turns sour.

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Adobe wants a more authentic NFT world

Adobe's Content Credentials feature will allow Creative Cloud subscribers to attach edit-tracking information to Photoshop files. The goal is to create a more trustworthy NFT market and digital landscape.

Adobe's Content Credentials will allow users to attach their identities to an image

Image: Adobe

Remember the viral, fake photo of Kurt Cobain and Biggie Smalls that duped and delighted the internet in 2017? Doctored images manipulate people and erode trust and we're not great at spotting them. The entire point of the emerging NFT art market is to create valuable and scarce digital files and when there isn't an easy way to check for an image's origin and edits, there's a problem. What if someone steals an NFT creator's image and pawns it off as their own? As a hub for all kinds of multimedia, Adobe feels a responsibility to combat misinformation and provide a safe space for NFT creators. That's why it's rolling out Content Credentials, a record that can be attached to a Photoshop file of a creator's identity and includes any edits they made.

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Protocol | China

Why another Chinese lesbian dating app just shut down

With neither political support nor a profitable business model, lesbian dating apps are finding it hard to survive in China.

Operating a dating app for LGBTQ+ communities in China is like walking a tightrope.

Photo: Nicolas Asfouri/AFP via Getty Images

When Lesdo, a Chinese dating app designed for lesbian women, announced it was closing down, it didn't come as a surprise to the LGBTQ+ community.

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Zeyi Yang
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The Oura Ring was a sleep-tracking hit. Can the next one be even more?

Oura wants to be a media company, an activity tracker and even a way to know you're sick before you feel sick.

Over the last few years, the Oura Ring has become one of the most recognizable wearables this side of the Apple Watch.

Photo: Oura

Oura CEO Harpreet Rai swears he didn't know Kim Kardashian was a fan. He was as surprised as anyone when she started posting screenshots from the Oura app to her Instagram story, and got into a sleep battle with fellow Oura user Gwyneth Paltrow. Or when Jennifer Aniston revealed that Jimmy Kimmel got her hooked on Oura … and how her ring fell off in a salad. "I am addicted to it," Aniston said, "and it's ruining my life" by shaming her about her lack of sleep. "I think we're definitely seeing traction outside of tech," Rai said. "Which is cool."

Over the last couple of years, Oura's ring (imaginatively named the Oura Ring) has become one of the most recognizable wearables this side of the Apple Watch. The company started with a Kickstarter campaign in 2015, but really started to find traction with its second-generation model in 2018. It's not exactly a mainstream device — Oura said it has sold more than 500,000 rings, up from 150,000 in March 2020 but still not exactly Apple Watch levels — but it has reached some of the most successful, influential and probably sleep-deprived people in the industry. Jack Dorsey is a professed fan, as is Marc Benioff.

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David Pierce

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