DoorDash Inc.’s shares fell on Thursday after short-seller Citron Research described the food delivery company’s initial public offering as the “most ridiculous” of the year and said the stock is worth a fraction of its current price.

Direct competitors, including Grubhub Inc., Uber Technologies Inc. and the recently acquired Postmates, are typically valued at three to six times sales, Citron said in a research report. DoorDash was trading at 19 times. However, accounting standards can vary from company to company.

DoorDash should be worth US$40 a share, Citron said, citing intense competition in the market for food delivery, lack of brand loyalty from customers and potential government regulation. That would represent a 74 per cent decline from Thursday’s closing price.

The stock fell as much as 5.1 per cent following Citron's comments.

DoorDash has gained 51 per cent since its debut last week. It fell 2.4 per cent to US$154.21 on Thursday. DoorDash declined to comment.

The market debut of DoorDash was one of the most anticipated of 2020, already a banner year for startups going public. Back in June, private investors had valued the San Francisco-based company at US$16 billion. When it opened for trading on Dec. 9, its fully diluted value topped US$68 billion.

DoorDash, the largest food delivery app in the U.S., faces strong competition, notably from Uber and Grubhub. Uber tried to acquire Grubhub this year, until Just Eat Takeaway.com NV intervened. Uber bought Postmates instead.

Now DoorDash is eyeing delivery beyond just meals. The company started ferrying around convenience store items such as toilet paper this spring, which puts it in closer competition with giants such as Amazon.com Inc.