Stock market debut

Deliveroo share price plummets on first day

Botched stock market start for Deliveroo
Botched stock market start for Deliveroo

Deliveroo's share price fell 30 percent at Wednesday's stock market open. The delivery service was previously valued at GBP 7.6 bn (about €8.91 bn).  Deliveroo was targeting an evaluation of between GBP 7.6 bn and GBP 8.8 bn for its IPO.

The stock fell more than 30 per cent during the day from 390p to 271p. Shares in competitors Just Eat Takeaway and Delivery Hero also fell in the wake of this, by up to 2.7 per cent.

British media said investigations overshadowed the company's IPO. Deliveroo revealed in the prospectus for its IPO that it is battling legal claims or regulatory investigations in the UK, France, Spain, the Netherlands and Italy over the classification of its couriers. Deliveroo, for example, warned in advance that its business model might need to be revised if it was required to provide holiday and sick pay, minimum wages and other benefits to drivers.

In addition to working conditions for delivery drivers, the curtailment of voting rights that company chief Will Shu is using to secure control is also putting off potential investors, investment strategist Michael Hewson of brokerage CMC Markets told Reuters news service. They also doubted Deliveroo would be in the black any time soon in the hotly contested meal delivery market.

With material from Reuters.

About Deliveroo

Deliveroo has around 45,000 restaurants in the UK and more than 100,000 worldwide on its platform. Recent business figures showed that the total value of orders received in January and February 2021 was 121 per cent higher than the same period last year, while the total value for 2020 was £4.1bn, up 64 per cent year-on-year.