SoftBank’s paper profit on DoorDash hit $11.2 billion after the food delivery platform’s initial public offering, sending the Japanese company’s own stock surging for a second day.
DoorDash shares closed at $189.51 on the first day of trading, almost 86 per cent higher than the listing price. The first-day jump, the third-biggest this year in the US for a large IPO, gives the company a market capitalisation of $60bn. SoftBank’s stock climbed as much as 6.8 per cent in Tokyo trading on Thursday.
The Tokyo-based company’s stock had surged on Wednesday to a 20-year high, after Bloomberg News reported founder Masayoshi Son is considering a ‘slow-burn’ buyout to take the company private. The shares are up more than 65 per cent this year so far, pushing its market valuation to about $160bn.
The DoorDash gain could raise profit in SoftBank’s Vision Fund unit to its highest ever, after record losses in the last fiscal year. The global rally in technology shares has lifted the value of stakes in public firms like Uber Technologies Inc. and improved the prospects for startups in its portfolio.
Vision Fund’s profit in the coming quarters is likely to receive a boost from more portfolio companies planning IPOs, a list that includes South Korean e-commerce giant Coupang, online insurance platform Policybazaar and used car retailer Auto1 Group.
SoftBank owns 20 per cent of DoorDash post IPO, a stake it acquired over a period of two years for $680 million.
The Vision Fund first invested in DoorDash in the spring of 2018, acquiring almost 51 million shares at a price of $5.51. It did so again twice the following year, as the price climbed to $22.48 and $37.94. The final round this June saw SoftBank pay $45.91 for just a little over 1 million shares.
DoorDash had 50 per cent of US market share as of October, surging past UberEats, GrubHub and Postmates, according to its filing documents. That number is up from just 17 per cent in January 2018.
DoorDash said there is also an opportunity for that market to expand, with fewer than 6 per cent of US residents currently using its service. Revenue in the first nine months of the year more than tripled and its net loss narrowed from a year earlier on a surge in new customers, the company said.
