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SoftBank shares jumped amid DoorDash IPO

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Jim Cramer: Young, retail investors may drive DoorDash IPO Description video: \”This newer brand of investors I’ve been profiling on \”Mad Money\” have a lot of capital,\” CNBC’s Jim Cramer said Wednesday ahead of DoorDash’s highly anticipated IPO. \”DoorDash is […]

Jim Cramer: Young, retail investors may drive DoorDash IPO

Description video:
\”This newer brand of investors I’ve been profiling on \”Mad Money\” have a lot of capital,\” CNBC’s Jim Cramer said Wednesday ahead of DoorDash’s highly anticipated IPO. \”DoorDash is used by a lot of younger people, both in the suburbs and in the cities, so I think you’re going to see incredible enthusiasm. I wish that people would use limit orders, but that is a parlance, that they don’t understand.\” Subscribe to CNBC PRO for access to investor and analyst insights: https://cnb.cx/2Vtntx6 \n\nCNBC’s Jim Cramer said Wednesday he believes there is “rabid money” interested in upcoming technology IPOs, but he urged younger investors not to chase after DoorDash once the third-party delivery company goes public.\n\n“When people know the brand, the younger investors just say, ‘You know what, get me some,’” Cramer said on “Squawk on the Street,” “DoorDash is used by a lot of younger people, both in the suburbs and in the cities, so I think you’re going to see incredible enthusiasm.”\n\nDoorDash, which began trading Wednesday, sold shares in its initial public offering at $102 apiece, above its targeted range of $90 to $95. The stock later opened at $182 per share Wednesday, putting DoorDash’s market cap at $57.8 billion.\n\nBefore it opened, Cramer urged young investors to be careful about chasing the stock. The “Mad Money” host previously advised investors to buy it at only below $100 per share.\n\n“I don’t want them to lose what discipline they have because then we’re starting to get into a 1998, 1999 period,” Cramer said, referencing speculation in tech stocks fueled the dot-com bubble.\n\nDoorDash is the first IPO in a late-year consumer technology wave, which includes the expected debut of online home rental marketplace Airbnb on Thursday. Online stock trading app Robinhood, also favored by younger investors, reportedly hired Goldman Sachs to lead a potential IPO next year.\n\nThere is just a general appetite for public offerings from tech companies, Cramer said. “There’s plenty of money, rabid money. I think there’s money that basically says, ‘We don’t really care what that opening price is going to be,’” he added. “There’s not going to be a lot of discipline in a lot of these market buyers. They’re not going to put a price limit on it.” \n\nDoorDash, in particular, has experienced tremendous growth during the coronavirus pandemic, with stay-at-home orders leading to more consumers opting to have food delivered to their door. The company’s order volume was $16.5 billion through the first nine months of this year, up from $5.5 billion in the same window of 2019.\n\nMany on Wall Street are wondering what happens to DoorDash’s business once the worst of the pandemic subsides.\n\nWhile acknowledging that people will choose to dine at restaurants instead of ordering delivery, Cramer said, “I don’t think DoorDash goes away.” He also noted there could be more restaurants in business as the health and economic situations improve, expanding the market for DoorDash. Cramer temporarily shuttered his own restaurants in New York City due to the pandemic.\n\nDespite DoorDash’s surge in 2020, Cramer said there are worrisome aspects to its business that warrant investor consideration.\n\n“I think it’s more of a duopoly than it’s been before because of Uber Eats. Good business. Great business? I don’t know. It’s still a delivery system,” Cramer said. “They’ve made a suburban footprint, which is really brilliant but … in the end, we know that the moat is only as good as the fact that they have low prices and they’ve got good technology.”\n\n» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision\n» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC\n» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic\n\nTurn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.\n\nThe News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast \n \nConnect with CNBC News Online\nGet the latest news: http://www.cnbc.com/\nFollow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC\nFollow CNBC News on Facebook: https://cnb.cx/LikeCNBC\nFollow CNBC News on Twitter: https://cnb.cx/FollowCNBC\nFollow CNBC News on Instagram: https://cnb.cx/InstagramCNBC\n\nhttps://www.cnbc.com/select/best-credit-cards/ \n\n#CNBC\n#CNBCTV

SoftBank shares jumped amid DoorDash IPO

SoftBank Group Corp shares rose 11% after the investment conglomerate made a profit of 11.2 billion from its stake in DoorDash Inc amid its debut on the US stock market.

SoftBank shares jumped amid DoorDash IPO

Over the past three years, SoftBank has invested $ 680 million in DoorDash.

Investment giant jumped 19% in Tokyo to close at 20-year highs.

DoorDash shares ended up 87.5% after yesterday’s IPO, pushing the company’s value to $ 68.4 billion, more than four times its fundraising estimate six months ago..

The current situation may have a positive effect on the plans of the CEO of SoftBank Masayoshi Sona reactivate its $ 100 billion Vision fund, which saw a string of losses last year, from office sharing at startup WeWork to Wag dog walking project.

SoftBank said last month that its fund is now worth about $ 76.4 billion, slightly more than the $ 75 billion paid out for its 83 investments, following growth in public markets fueled by the pandemic.. 

SoftBank is investing on a smaller scale with its Vision Fund 2 as it hopes to win the trust of the supporters (Saudi Arabia’s sovereign wealth fund) of the first project and demonstrate the strength of its investment potential.

SoftBank’s recent wins include a rally in Uber Technologies Inc, where it is the main shareholder, and the $ 40 billion sale of Arm to Nvidia Corp..

Vision has participated in several DoorDash fundraisers. He paid $ 280 million for his first stake in the company in March 2018, and then bought several more blocks of securities for about $ 350 million.. According to regulatory documents, the fund made its last investment in DoorDash ($ 50 million) in June 2020..