DoorDash Inc., doubling down on delivery by announcing its intent to buy Helsinki, Finland-based company Wolt in an all-stock deal worth more than $8 billion, saw its shares surge more than 20% after hours Tuesday.
stock, which had closed 0.6% lower during the regular session at $192.02, reached as high as $238 — which would be a record if it holds up tomorrow — in extended trading. The company’s shares closed at their highest level at $222.91 last month after an analyst raised his rating and target price for the stock.
During the company’s third-quarter earnings call Tuesday, DoorDash Chief Executive Tony Xu said Wolt, which has more than 4,000 employees, has built “a remarkable business” that has become a leading local commerce-delivery platform across 23 countries, 22 of which would be new to DoorDash. Wolt delivers from restaurants and 14 other categories, including grocery.
Prabir Adarkar, chief financial officer of DoorDash, said on the call that buying Wolt both “raises our level of focus outside the U.S.,” where the company is the market leader, and “expands our management bandwidth outside the U.S.”
When the deal closes in the first half of next year as expected, Wolt Chief Executive Miki Kuusi will run DoorDash International, reporting to Xu. The combined companies will serve global markets with more than 700 million people, according to the investor presentation.
Kuusi said on DoorDash’s earnings call that Wolt, which he co-founded in 2013, was built from the start to expand beyond Finland, which has a population of about 6 million people. Merging with DoorDash will accelerate that mission, he said.
It is the latest instance of consolidation in the app-based food-delivery industry, which saw demand and company valuations skyrocket at the beginning of the coronavirus pandemic. Last year, European company Just Eat Takeaway announced it was buying Chicago-based Grubhub
and Uber Technologies Inc.
said it would acquire Postmates. Both deals have been completed.
DoorDash equity issued as part of the deal will be valued at $206.45 a share, and the deal is expected to add to growth in DoorDash’s gross order volume in 2022.
Also Tuesday, DoorDash reported record revenue and orders in the third quarter. Revenue rose to $1.3 billion from $879 million in the year-ago quarter. Gross order volume increased to $10.4 billion, beating analysts’ expectation of $9.96 billion, on a total 347 million orders, more than the 334.7 million analysts expected.
The company widened its net loss in the quarter, though, to $101 million, or 30 cents a share, compared with a loss of $43 million, or 96 cents a share, in the year-ago period. Adjusted Ebitda was $86 million, same as the third quarter last year.
Analysts surveyed by FactSet had forecast an adjusted net loss of $84 million, or 10 cents a share, on revenue of $1.17 billion.
DoorDash expects fourth-quarter gross order volume of $10.3 billion to $10.7 billion. Analysts had forecast $10.3 billion. It also expects adjusted Ebitda of $0 to $100 million.
The company’s stock has risen nearly 34% so far this year, while the S&P 500 Index
has climbed about 25% year to date.