The primary goal of a business is to generate profits, right?
Many start-ups seemingly forgot this principle over the last 15 years, especially during the pandemic-fueled market bubble of 2021. A poster child of unprofitability has been DoorDash (NYSE: DASH), a food delivery service that has exploded in popularity over the last few years. Even though the company processes tens of billions of dollars in customer orders every year, operating losses continue to pile up and in fact have only gotten worse in recent quarters. Undeterred by these losses, the executive team stated in their latest quarterly letter that the delivery platform it is building will create shareholder value (i.e., generate profits) over the long term.
Should investors trust that DoorDash management is building a profitable enterprise for the future? Or is food delivery just an unsustainable business model?
Source Fool.com