In This Article:
Deliveroo (DROOF), the British food delivery company, says DoorDash (DASH) made $3.6 billion offer to buy all of its shares. Market Domination Overtime Anchor Julie Hyman and Lou Basenese, TheBigSkinny.com founder and Prairie Operating Co. executive vice president of market strategy, discuss the news in the video above.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
It appears DoorDash is sinking its teeth into its UK competition. British based deliveroo says it received a proposal earlier this month from DoorDash to buy all of its shares for $3.6 billion. DoorDash the top restaurant delivery service in the US. It has said it wants to strengthen its position abroad. The two companies have talked before, but never arrived at an agreement. Now, DoorDash would need to make a firm offer to Deliveroo by May 23rd. DoorDash shares did erase their earlier gains to trade about 0.6% lower, 6/10% lower after the news, but they closed lower by not even that much. Um, but you know, it's interesting when you talk about the the food delivery market here, and that we have seen strength from some of the other food delivery companies like an Uber, you know, from sort of expanding internationally.
Yeah. For me, I think there's necessary consolidation. So if you look historically on this group of companies, it's the frictionless economy, the convenience economy. There's not enough margin there for this many players. I mean, we're here in New York, you go by any restaurant, you can see six or seven different types of delivery services, right? So I think this is a natural consolidation that has to happen. I look at valuations for DoorDash, seems stretched. Yeah. You got to buy the growth and you're earning somehow, other you're not going to get it organically. And we've seen that with Uber too. It's a tough, it's a tough business to be in.
Here's a couple fun things about DoorDash. It's up this year. I know. It's up 12% this year, which I didn't realize. It's up almost 50% over the past um, 12 months. And remember this company came public in 2020, it came public at what just over $100 a share and it's trading at 180, was it came public at 102 and it's at 187, not bad.
Not bad, and it's all those outrageous fees, right? I think this is what from the concern consumer side, when you used it, it was never this expensive. Same by Lyft and Uber. It's just it's you're seeing the inflation creep up, which is conveying benefits to the company, but not to the consumers, right?
Which is why I frequently still go and pick stuff up actually.
I'm with you. Yeah.