DoorDash just experienced its worst trading session ever, with shares plummeting 17% as investors revolted against the company's aggressive spending strategy. The food delivery giant's stock dump came after revealing plans to spend hundreds of millions more on autonomous delivery and global expansion, following a $5.1 billion acquisition spree that's raised serious questions about profitability priorities.
DoorDash just delivered its shareholders the worst trading day in company history. The food delivery platform's stock cratered 17% as investors sent a clear message: they're not buying CEO Tony Xu's billion-dollar spending spree anymore.
The carnage started during DoorDash's earnings call when executives revealed plans to shell out "several hundred million dollars" next year on new product initiatives like autonomous delivery robots and a global tech stack overhaul. Coming on the heels of a massive acquisition binge that's already cost the company over $5 billion this year, Wall Street finally said enough.
"Our track record in investing in the areas that we currently have operating have suggested that we've had some success in repeating this playbook, and we're doing this now for future growth," Xu told analysts, according to CNBC's earnings coverage. But investors aren't convinced this playbook still works in today's economic climate.
The numbers tell a mixed story. DoorDash's third-quarter revenue jumped 27% to $3.45 billion, beating Wall Street's $3.36 billion estimate. But earnings per share of 55 cents fell well short of the 69 cents analysts expected, according to LSEG data. More troubling for investors, the company's fourth-quarter EBITDA guidance of $710-$810 million came in below the $806.8 million consensus.
This year's spending spree reads like a tech acquisition fever dream. DoorDash dropped $1.2 billion on restaurant booking platform SevenRooms and then followed up with a $3.9 billion purchase of British delivery firm Deliveroo. The company also launched its autonomous delivery robot "Dot" and rolled out new DashMart fulfillment services.