This is one of the concerns that has turned Instacart's IPO into a flop on its second day as a public company.
To be successful, an IPO must deliver a big pop to the investors who signed on to buy stock when it debuts.
He came out with an analysis of Instacart's business on Tuesday, valuing the company at $29 a share.
The reason: The grocery business is low-margin, so there's not a lot of room for Instacart to skim more fees.
"In short, the growth in online grocery sales will be higher than total grocery sales growth, but not overwhelmingly so."
Persons:
Aswath Damodaran, Fidji Simo, Instacart, Rowe Price, Damodaran, there's, Uber, Instacart doesn't
Organizations:
Service, Fidelity, DST Global, NYU's Stern School of Business, Instacart Shoppers, Shoppers, Tech
Locations:
Wall, Silicon, Aswath, COVID