DoorDash, the food delivery provider that is seen a surge in demand during the coronavirus pandemic, sold shares in its IPO at $102 apiece, pricing above its range, according to people familiar with the matter. The offering on Tuesday values the company at $32.4 billion, based on common stock outstanding and $38.7 billion on a fully diluted basis. The company previously said it expected to sell shares at between $90 and $95. The sources asked not to be named because the pricing is still confidential.

Since DoorDash’s roadshow began last week, investors have shown strong interest in the offering, prompting the company to boost the price range from an initial $75 to $85 a share. Investors have been excited by the company’s strong growth as consumers move away from dining in restaurants during the Covid-19 pandemic and by its ability to conquer local markets quickly and show profits. In the quarter ended in June, DoorDash posted a profit of $23 million on $675 million in revenue, though it reverted to a net loss the next quarter even as revenue jumped to $879 million.

This week is shaping up to be one of the biggest of the year for the new-issue market. A day after DoorDash’s debut, Airbnb Inc. is set to begin trading. The San Francisco home-sharing company would be valued at $42 billion at the high end of its also-boosted price range.

December is typically a quiet time in the IPO market. This year there will instead be a flurry of offerings as the pandemic turns the calendar on its head. In addition to Airbnb and DoorDash, videogame company Roblox Corp. and the parent of online retailer Wish, ContextLogic Inc., are expected to make their debuts before the year is through. Both DoorDash and Airbnb are using novel models for pricing their IPOs following virtual roadshows occasioned by the coronavirus pandemic.

The companies each asked investors to input stock orders through a computerized system in which they outline the number of shares they are seeking and at what price. Investors have the option to indicate how much they are willing to buy at various price points. This approach differs from a traditional IPO, in which underwriters typically confer directly with potential investors and play a greater role in setting the price.

Todd Horwitz Chief Strategist BubbaTrading.com
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