A $9 billion delivery service

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Stock market
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Good afternoon,

Sometimes you have to shake your head over some of these stock offerings.

The latest is Philadelphia-based goPuff, a delivery company that delivers items like munchies, toilet paper, and in some locations, alcoholic beverages.

GoPuff recently raised $1.5 billion through a stock offering.  The company now has a dizzyingly high valuation of $9 billion.

By contrast, the stock market value of Wilmington-based WSFS is a hair under $2.5 billion. 

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 Philadelphia Inquirer reporter Joe DiStefano took a look at the  sky-high valuations of Philly-area start-ups. that include GoPuff in a piece posted today.

Newark and the University of Delaware community played a role in testing goPuff’s business model that allows students to buy  Ben and Jerry’s and Dorito’s from their couch. Deliveries can come in 30 minutes.

The company has since built a nationwide presence using mini distribution centers.

GoPuff now has a brick-and-mortar presence on the West Coast. Armed with private equity funds, it recently acquired BevMo, a California-Arizona-Washington state liquor store chain with more than  100 stores for about $350 million.

BevMo faces growing competition from Total Wine, a liquor store chain that got its start at the flagship store in Claymont. Total Wine has since expanded from coast to coast. 

With BevMo, GoPuff delivery can use its delivery model to quickly dispatch adult beverages to homes.

The stock market value of GoPuff gives BevMo the heft needed to expand and deal with the complex world of liquor laws.

The chances of alcohol deliveries in Delaware from GoPuff are tiny, but who would have thought you could carry out cocktails from your favorite restaurant or watering hole? The pandemic changed all that.

Also possible is goPuff buying a marijuana delivery service. Don’t laugh. It’s already happening in California.

Despite these moves, it is hard to wrap one’s head around investing in a company with annual sales that amount to about two-days-worth of Amazon revenue.

Then again, we have the case of Fisker Inc, a new electric vehicle start-up founded by Henrik Fisker.

His first venture that used state and federal funds in an attempt at assembling a  hybrid vehicle at the former GM Boxwood plant west of Wilmington crashed and burned. The new Fisker Inc., which will farm out manufacturing, is valued at $5 billion, despite few hard assets.

Stay dry today. This newsletter returns tomorrow unless I get a $350 million buyout offer. – Doug Rainey, chief content officer.

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