Deliveroo takes a slap on the stock market for social fears
Deliveroo took a 30% drop from the IPO preyyo on the first day of listing, only to partially recover and take home a loss of only 11%. While the value of the IPO, public offering was 390 pence, it fell to 270 pence per share just after the opening, and then climbed back to 313 pence, marking a decrease of 15% compared to the IPO price:
It was a bad debut for a large IPO on which many were confident, also given the sector, home deliveries and similar services, which were enhanced by the generalized closedown.
"Deliveroo went from hero to nil as its much-publicized stock market debut falls flat," said Russ Mold, investment director at AJ Bell. "It would be better to get used to the nickname 'Flopperoo'."
The UK-based company had priced 384.6 million shares at 390 pence per share, the low of its traded range of 390 pence ($ 5.65), hoping to reach a valuation of 7.6 billion. of pounds ($ 10.5 billion). But that didn't quite work out and the stock lost more than £ 2 billion ($ 2.7 billion) in market value on its commercial debut.
Analysts say its IPO took a turn for the worse as multiple fund managers said they would not support the business due to concerns about business practices, scaring many who have applied for its shares and possibly rushing to dump them.
"It reflects the cautious approach that big funds have shown to the stock amid concerns about labor management practices and governance," said Neil Wilson, chief market analyst at Markets.com. "Mlti funds are left to watch".
Why this failure in quotations:
- first of all, the sector is proving to be very competitive, with various players who have entered or who have transformed their business in the direction of the delivery service;
- hence the legal and social problems that this type of services are raising more and more. In California, Uber Eats was sentenced in California to employ all the deliverymen as employees and in Italy there was a similar sentence;
- therefore the awareness that, sooner or later, the closedowns will cease and could lead to a reduction in the business of Deliveroo and its competitors;
- moreover, the governance of the company is very much shifted to the CEO, whose shares are worth 20 votes of ordinary shares.
Exploiting too much delivery drivers is not a particularly popular activity for investors, who prefer more stable businesses to those based on the gig economy and fake self-employed jobs. Who knows if even the administrators will understand.
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The article Deliveroo takes a slap on the stock exchange for fears of a social nature comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/deliveroo-prende-una-sberla-in-borsa-per-i-timori-di-carattere-sociale/ on Wed, 31 Mar 2021 15:47:33 +0000.