business news in context, analysis with attitude

•  From last Friday's The Information:

"Uber has finally hit pay dirt with investors after years in the stock market wilderness, with its stock now trading 29% above its IPO price. Instacart, which appears to be reliving Uber’s early dark days, can only hope for a similar resurrection one day. The grocery-delivery firm’s stock sank to a new low today of $22.43, 25% below its IPO price from mid-September … Instacart’s stock price could fall further, once lockup restrictions on early shareholders selling lapse in a couple of months, bringing more stock onto the market. It’s conceivable it could turn things around, just as Uber has done. But in the near term, Instacart shareholders are in for some pain."

The story points out that Instacart's stock "is cheap compared with those of firms in similar businesses. Instacart is now trading at 1.4 times forward sales. By comparison, Uber, which operates a ride-hailing and restaurant-delivery service, is trading at 3 times the same multiple, and restaurant-delivery service DoorDash is at 3.5 times, according to Koyfin data. The discrepancy likely reflects anemic growth in Instacart’s core business. The total volume of spending on the platform rose just 4.6% in the first nine months of this year, while both Uber and DoorDash are reporting growth above 20% for a similar metric. That suggests those two companies are doing a better job of winning over consumers than Instacart is."