Here's Why DoorDash Stock Dropped 12% in October
Shares of third-party delivery company DoorDash (NYSE: DASH) dropped 12% in October, according to data provided by S&P Global Market Intelligence. By comparison, the S&P 500 was up 8% for the month. Regulation rumors, financial reports from rivals, and commentary from the analyst community all weighed on investors' minds and led to the underperformance during the month.
For DoorDash, it was a quiet month for company-specific news. But investors were watching the gig-work economy as a whole. The stock fell along with its peers on Oct. 11 when the Department of Labor released a proposal that could change the company's business model if enacted. DoorDash relies on independent contractors to do its deliveries. But the Department of Labor could change the very definition of an independent contractor.
Mizuho analyst James Lee believes fears related to this proposal are overblown. In general, analysts are more worried about the economy and what that could mean for DoorDash's business. For example, Truist analyst Youssef Squali lowered his price target for DoorDash stock by 45% to $101 per share, according to The Fly. Squali sees a rising possibility for a recession in 2023.
Source Fool.com
