[I own DoorDash stock.  This is not investment advice.  Please do your own due diligence.]

In the second half of 2021, DoorDash’s stock price more than doubled.  In a short span of a few days in November 2021, DoorDash’ stock price surged by more than 30% to over $250 a share.  Clearly, DoorDash’s company fundamentals had not improved by 30% in those past few days.  Recognizing that stock prices reflected more of investors’ emotions and less of business fundamentals, I sold all my DoorDash stock in early November 2021. 

Coming into 2022, DoorDash’s share price has dropped by over 65%.  Over the past few days, it has come down by 20%.  DoorDash’s actual business did not come down by 20% over the past few days.  Realizing that stock prices reflect more of investors’ emotions and less of business fundamentals, I kept buying DoorDash stocks in recent days.

I am going to explain what I think has happened in the stock market and why I remain bullish about DoorDash. 

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[I own DoorDash stocks. This is not investment advice. Do your own due diligence.]

DoorDash announced its 2022 Q2 earnings last week.  My assessment is that DoorDash’s results are mostly positive.

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Update on Grubhub/Amazon Deal:  Starting Jul 6, 2022,  Amazon Prime members in the U.S. are given a free, one-year Grubhub+ membership with unlimited free food deliveries.  This arrangement effectively brought the e-commerce behemoth back into the U.S. food delivery arena.  To me, it served as a “stress test” on incumbent players such as DoorDash and Uber Eats.  And three days later, on Jul 9, 2022, I made the public prediction that the Grubhub/Amazon deal would NOT matter (see my blog here).  

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[I own both stocks. This is not investment advice. Do your own due diligence.]

I will write a piece later. Just to share the joy first.

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[I own DoorDash stocks. This is not investment advice. Do your own due diligence.]

The Deal

Mainstreet news media report the deal as such: “Amazon Bringing Grubhub To Prime Users After Buying 2% Stake”, “Amazon buys 2% stake in Grubhub, offering new perk for Prime members.”

Astute investors study source materials. According to Grubhub’s official newsroom release:

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[I own DoorDash stocks.  This is not investment advice.  Do your own due diligence.]

Studying DoorDash’s 2022 Q1 earnings, released on May 5, 2022, I am convinced that DoorDash is in great shape. 

Many of DoorDash’s metrics are hitting all-time high. Tony Xu, CEO of DoorDash, said on CNBC the day after company earnings: “what we see internally and in the fundamentals is all-time highs in our user base, all-time highs in our DashPass subscriber program, as well as order frequency across all cohorts, as well as increasing profitability in an already profitable business which is our U.S. restaurant business.”

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[This is not investment advice. Do your own due diligence.]

The delivery space has produced a lot of headlines lately. This time, it is about Gopuff.

Gopuff is an Instant Delivery company founded in 2013. It promises delivery in 30 minutes or less and its delivery fee is $1.95 per order.

On March 31, 2022, Bloomberg reported that Gopuff is close to raising $1B and is laying off 3% of its workforce (source link). Combined with information from other news sources, we know the following data points about Gopuff:

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[This is not investment advice. Do your own due diligence.]

I want to write this piece to provide an update to my February 11 post, titled Instant Delivery: Challenges That Cannot Be Overcome. Since that post, several events have transpired, very much in the direction that I predicted.

First, at least two Instant Delivery companies have since folded or near-folded. On March 4, Buyk, an Instant Delivery company operating in New York and Chicago, furloughed ~98% of its employees (source link). Its CEO was quoted saying: “we find funds, we find a buyer or we have to liquidate” (source link).

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