Deliveroo was not welcomed with open arms on the stock exchange

The food delivery stock lost up to 30% on its first day on the London Stock Exchange. Big investors have expressed doubts about the deal

The Deliveroo app (photo Thomas Trutschel / Photothek via Getty Images) Deliveroo's difficult debut on the London Stock Exchange. The shares lost up to 30%, and then partially recovered ground. The food delivery company had set the issue price at 3.9 pounds, the minimum assumed for the initial public offering, for a market value of 7.59 billion. While starting from the bottom, trading of the stock (Roo) fell as low as £ 2.73, wiping out 2.3 billion valuation, before starting to recover some of the decline. Shares for sale are 384 million, for an offer of approximately 1.5 billion pounds. One billion will go to the company and 500 million to the initial investors, including Amazon.

Deliveroo initially aimed for a maximum valuation of 8.8 billion pounds and the announcement of the listing was greeted at early March with the favor of the British Finance Minister. In recent days, the company has revealed losses of 223.7 million pounds in 2020, albeit lower than the 317.3 million in the previous year. Then it adjusted the launch price, officially adapting to market trends, lowering the high end from 4.6 pounds to 4.1, for a maximum valuation lowered from 8.8 to 7.8 billion pounds, as Cnbc explains. . Until the current flop.

There are several factors that weigh on the launch of Deliveroo on the Stock Exchange. Some large British investors have avoided participating in the transaction, citing the particular shareholding structure that gives founder Will Shu 57.5% of the voting rights for three years, while holding 6.3% of the shares. Another subject of discussion is the rights of workers: the independent workers' union argues that riders can earn even less than 2 pounds an hour. Shu's stake is expected to amount to around £ 450 million, after listing at 3.9 per share.

Furthermore, although the gross value of transactions processed by the platform increased by more than 64% in 2020, hitting 4.1 billion pounds due to the growing need for home deliveries due to the pandemic, the distribution of vaccines is expected to gradually reopen the economy in various countries, starting with the United Kingdom.

La The listing, led by JpMorgan and Goldman Sachs, began at 8 am in conditional mode and retail investors will not be able to participate in the negotiations until April 7. This means that the initial public offering can be canceled and trades canceled as long as the unconditional trading officially begins in a week with the final admission of the stock to the London Stock Exchange and with the settlement of the trades completed up to then. br>

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Topics

Finance Food delivery Gig economy United Kingdom globalData.fldTopic = "Finance, Food delivery, Gig economy, UK"

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