Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% Upgrade now

DoorDash Plunges on Amazon's Deal with Rival Grubhub, BofA Sees Increased Competition

Stock Markets Jul 06, 2022 13:36
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
AMZN
-1.57%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TKWY
+5.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DASH
-0.78%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Senad Karaahmetovic

Shares of Just Eat Takeaway (AS:TKWY) are surging in Europe today after Amazon (NASDAQ:AMZN) acquired a 2% stake in the company’s U.S. food delivery unit Grubhub.

Moreover, Amazon has an option to increase its stake to 13% if certain performance-related obligations are met.

The e-commerce giant can now offer its Prime members access to the free delivery service for a year. In the meantime, Just Eat said it will continue exploring “the partial of full sale of Grubhub.”

BofA analyst Michael McGovern moved quickly to cut the price target on Just Eat’s rival DoorDash (NYSE:DASH) to $85 per share from $90 as Amazon’s involvement will likely bring increased competition for DASH.

“This offer should lead to elevated competition for its DashPass subscription offering, which competes with Grubhub+ and could see headwinds to customer acquisition and retention,” McGovern told clients in a note.

“Although we think Grubhub’s platform lags DoorDash in restaurant selection and logistics capabilities, free user acquisition from a base of 100mn Prime subs will be a competitive advantage. We believe the DashPass offering maintains competitive advantages in restaurant selection, logistics speed, and non-restaurant categories that will continue to generate share gains despite elevated competition for customers,” McGovern added.

The analyst sees “little impact” on DASH’s near-term growth or margins. Still, McGovern forecasts “some overhang for the stock due to the long-term potential for Amazon to re-enter the food delivery industry.”

DASH shares are down 8% in pre-open Wednesday.

DoorDash Plunges on Amazon's Deal with Rival Grubhub, BofA Sees Increased Competition
 

Related Articles

S&P cuts UK rating outlook after tax cut plan
S&P cuts UK rating outlook after tax cut plan By Reuters - Sep 30, 2022 1

By David Milliken LONDON (Reuters) -Ratings agency Standard & Poor's cut the outlook for its AA credit rating for British sovereign debt on Friday to "negative" from "stable" as...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email