Part 3 of 3 – “A Nice Deal Built on Greed”

It is impressive to see that a company created from nothing can be worth €7 billion in just 7 years. There are not many of those around today! Just think how many national postal companies exist and how many courier groups are driving their Trucks around the country – Amazon, Fedex, UPS, DHL, etc… these companies make nice profits but with less noise. 

It is also impressive that this same company can only promise profits in the next ten years because up to now it has only made rather big losses…

… and it is also impressive that they can open up a distribution network in 23 countries!

We are told that the CEO had no idea about the sale to DoorDash a few months ago. That too is rather impressive because it shows that there must have been very little strategic thinking at the top of the company. Nothing in the stock markets has changed to expedite the deal. In the last two months there has not been any major changes in the economies. Covid is still raging and price inflation is now reported to achieve new heights.

Naturally venture capital funds and other big investors in Wolt, like EQT, in Sweden, and Goldman Sachs, the American bank, are short-term investors ready to pump up the price of the shares and sell when the profits are juicy. The fact is that the founders have been diluted to minority positions and these funds rule the day. Guess who made the decision to sell…

… and it is impressive to see that DoorDash exchanged it shares for Wolt’s. The investors who now hold DoorDash shares can to sell these quoted shares more easily on the market because DoorDash is a New York Stock Exchange quoted company. They also make financial losses as well as delivering stuff! So Wolt is joining a very exclusive club that some investors seem very excited about… for some reason or other…

The question for investors who now hold DoorDash is fairly simple – they have a short-term advantage just now by being the biggest delivery group here and there – but for how long? 

As stated in the other articles, (Part 1 and Part 2), the delivery business is a low tech labour camp that relies on the supply of rather desperate people who are willing to work for a pittance that are the backbone of a big company that now makes even bigger losses. 

It is probably a good bet that the smart money has already left the stock!

Site Footer