DoorDash Drops 11% Days After Bbot Acquisition 

March 04, 2022

DoorDash (DASH) dropped 11.68% on Friday, trading for under $90 for the first time in 2022.

The sharp decline comes just a few days after DoorDash entered a definitive agreement to purchase Bbot, a New York-based tech startup that allows users to order food and beverages from their location. 

Bbot's capabilities bolster ordering and payment options for merchants. It works with bars, hotels, and ghost kitchens on top of restaurants to improve customer service, which were among the benefits DoorDash's Chief Revenue Officer Tom Pickett cited for the acquisition, saying it would grow sales and improve customer service.

DoorDash is held by 100 ETFs. The ETFs with the greatest DASH exposure are the Alpha -Intelligent Large Cap Growth ETF (AILG), with 3.84%; the ProShares On-Demand ETF (OND), with 3.69%; and the ProShares Online Retail ETF (ONLN), with 2.20%.

 

 

More than 5.9 million shares of DASH are held in ETFs, with Vanguard and iShares holding the top five spots for number of overall shares.

 

 

The Vanguard Total Stock Market ETF (VTI) is a huge fund, at $280 billion in assets under management, but even though it owns the greatest shares of DASH, its allocation is just 0.05%. The Vanguard Growth ETF (VUG) similarly has a weighting of just 0.11% to DASH, and the iShares Russell Mid-Cap Growth ETF (IWP) has an allocation to the stock of 0.38%. Although these funds all offer exposure to DoorDash, despite holding the most shares, their allocations are not terribly significant.

In terms of recent gains, two ETFs invested in DoorDash stand out. The RiverNorth Volition America Patriot ETF (FLDZ) and the First Trust Dorsey Wright People's Portfolio ETF (DWPP) have seen the biggest 30-day change—1.38% and 1.29%, respectively. 

 

 

Vanilla ETFs and actively managed ETFs make up more than half (53 of 100) of the ETF strategies holding DASH shares. 

Third-party food delivery systems as a whole have seen significant volatility in recent months, mirroring many other tech stocks. DoorDash's 52-week high is $257.25, while its low is only a few dollars under where it is currently trading, $85.18.

Although DoorDash is the most popular food sharing service app in America (more than 390,000 restaurants partnered with the company in 2021), concerns about future growth ability and stark industry competition have some investors worried about what's to come.

DoorDash's profitability (or lack thereof) is also cause for concern. The company has only ever been profitable for one quarter of its near-10-year existence—the second quarter of 2020, when app-based food delivery took off as a result of the COVID-19 pandemic—leading some investors to question if DoorDash's most profitable days are already behind it.

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