Fox Advisors CEO on downgrading DoorDash after strong IPO debut

Fox Advisors Founder & CEO Steven B. Fox joins Yahoo Finance Live to discuss why the company downgraded DoorDash after its strong IPO debut…

Video Transcript

¬†All right, let’s turn our attention now to the biggest story in financial markets this week, which is new issues coming to the market. As we mentioned at the top of the program, Airbnb shares more than doubled in yesterday’s trading session. And on Wednesday we saw shares of DoorDash rise some 80% in their debut.

Joining us now to talk more about DoorDash is Steven Fox. He is the founder and CEO at Fox Advisors. So Steven, you downgraded DoorDash, which makes sense. Stock went up 80% on its debut.

As you were thinking about the stock ahead of the IPO, based on, you know, what you saw in the [? S-1– ?] and obviously the market cap now has exploded just in a couple of days. How are you thinking about the business? And how excited are you still by DoorDash’s prospects? Maybe backing out, you know, a doubling in one trading session?

STEVEN FOX: Right. Those are a lot of questions packed in there. First of all, thanks for having me. I would say two points. One on the long termРI think the value of the network is significant.

The intrinsic value they’ve created to the local merchant back to the consumer is going to have increasing value over time. You can think of it sort of like a Verizon or an AT&T in that way. And also the technology that they’re building, the backbone of it– from Machine Learning to the domain expertise that they have in the field is important.

However, having said all that, it’s really hard to put a valuation in the next 6 to 12 months that would sort of justify going up another 20%, 30%. I think the stock probably has to gain some seasoning here. We need to see how…

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