This Investment Has Pockets
A CTO walks into the CEO's office "Boss, I have an idea that will boost profits and save us a ton of time. It can't miss."
The CEO nods "that's a really nice dress."
"Yeah, it's great…. It has pockets," the CTO breezes past the cringy non-sequitur "But I'm talking about restructuring our tech stack. We have three operating units doing all the same thing. Every time we push and update, we have to ship the fix to three different platforms. We have three engineering teams working on three different solutions to the same problem. It's expensive and slow."
"Pockets. Very practical." the CEO says. "That's where I keep my wallet. Also, my gum. My sunglasses. A comb. Eye drops too. And some aspirin, in case I get a headache. I have so much stuff in there it’s a struggle to keep track of it."
The CTO pipes up "that's exactly what I'm talking about. We need to clean out our pockets."
Stitching together an investment
DoorDash collected a few things into its pockets over the years. It acquired Wolt, a Finnish delivery service in 2022. Since then, Wolt largely continued to operate as a separate organization. It lived on its own code and had its own engineers. By itself, that junk wasn't large enough to move DoorDash to clean it up.
Then, it acquired Deliveroo in late 2025. That was a much bigger purchase. Now with three separate on-demand delivery networks, it made sense to revisit this collection
Early in 2026, DASH started this. It began an overhaul of the platform. At the end it'll have one technology platform for the whole network -- all its brands and all its geographies. Until then, though, it operates three technology platforms. Each has its own staff and cost. All the maintenance needs to happen in triplicate. Same goes for upgrades. On top of that, it's paying for the new platform.
Its margins, understandably look a bit frumpy.
The fabric of returns
The rest of the business, though, is humming. Gross order volume clipped ahead at 37% in Q1. It’s been rapidly expanding its network in existing locations -- gaining density, which eventually leads to higher margins. Its delivery fees are lower than its competitors’. Its service is faster. DASH's business hinges on an outfit of GOV, density and customer experience. These are all moving in the right direction. These are the big things that will drive DASH returns.
The costs though! DASH beat earnings expectations in Q1, but they were pretty low. Bulky costs have hurt DASH's profitability. Investors latched onto that. Shares marched steadily down over the past year.
Management guided that the tech-overhaul will last through the year. Unlike our out-of-touch fictional CEO in the intro, DASH's CEO - Tony Xu - has been a savvy operator. He's consistently delivered on operating improvements. After fitting the tech stack to the business' current figure, the market ought to manage much clearer focus on those things that will drive the long train of value. In the meantime, the shares offer a fetching price.
Disclaimer: None of this is investment advice. It's meant to illustrate ways LCM thinks about investing. Things that LCM decides are good investments for LCM and its clients are based on many criteria, not all of which are covered here. Some or all of LCM's ideas may not be suitable for other investors. LCM does not recommend investing either long or short any position mentioned. LCM may own positions in some of the companies mentioned. Some of its ideas will lose money — investing entails risk. See full disclaimer here.