Deliveroo, the food delivery company, crashes on Wednesday in its London stock market debut.
The British firm’s shares lose 23% after having fallen more than 30% at the start of the session.
A collapse that comes despite the volume of the initial public offering, one of the most anticipated in Europe, and with which Deliveroo finally raised around 6,000 million euros in the financing round.
Lower price range
The company set a price range of between 3.90 and 4.60 pounds per share for its premiere on the London selective.
In this way, Deliveroo was valued at about 8,800 million pounds, about 10,300 million euros, as advanced Bloomberg.
However, last week the company, one of the leaders in the delivery segment, reduced the range to a range between 3.90 and 4.10 pounds.
After the falls on Wednesday, the shares are below their ideal minimum price and move around 3.50 pounds.
The situation of the riders
A movement that comes in an attempt to attract more investors in the face of Deliveroo’s reputational problems due to the working conditions of its delivery people.
The low profit margin obtained by the ‘riders’ and their status as freelancers collide with the new ESG criteria (environmental, social and governance) that are already required of listed companies.
Added to this problem is the dual-class share structure that Deliveroo will use in its stock market journey.
Strengthening power for its founder
This will allow Founder and CEO Will Shu broad voting power for the next three years.
Thanks to these types of shareholding structures, the owners of the companies maintain control of them even after launching the initial public offering.
Investor uncertainty comes precisely after the company posted losses of 226 million pounds (263 million euros) in 2020 despite the boost its business received in lockdown during the pandemic.
This was reflected in the company’s turnover in the past year, which increased by 54% compared to the balance of 2019 to 1,381 million euros.
Deliveroo also saved 130 million euros in provisions, four times more than the previous year.
Boost for UK
All in all, Deliveroo’s IPO is the largest operation on the London stock market since the multinational’s debut. Glencore in 2011.
It also represents the first major boost for operations in the United Kingdom since Brexit took place at the beginning of the year.
Something that has been weakening London in recent months due to the flight of large corporations that have left the British capital due to the departure of the community bloc.
Investment banking giants like Goldman Sachs O JP Morgan they have transferred huge amounts of assets to what is expected to be the new European financial capital, the German city of Frankfurt.
–
