Deliveroo crashes 26% on stock market debut
DELIVEROO was branded “Flopperoo” after a disastrous stock-market debut yesterday.
Nearly £2billion was wiped off the value of the takeaway giant as City traders balked at its 390p-a-share price tag.
It closed the day at 287p, down 26 per cent, having crashed 30 per cent.
The snub is the latest setback for Deliveroo’s much-heralded float.
A number of big UK investors had publicly declared they would not buy shares in the firm because of concerns over worker rights.
Bosses had boasted that the listing could value Deliveroo, which has yet to make a profit, at up to £8.8billion. But they were forced to slash the figure by £1.2billion on the eve of listing.
Yesterday’s slump hit founder Will Shu, 41, in the pocket. He had been expecting to net a £550million fortune at the original top-end 460p price tag.
Another to lose out was US online giant Amazon, which bought a big stake in Deliveroo last year.
Insiders at the delivery firm were at a loss to explain why shares fell so much, but pointed to a weak response to some other recent technology listings.
The plunge left egg on the faces of
Deliveroo’s army of well-paid advisers, who had organised the flotation.
Russ Mould, investment director at City firm AJ Bell, said: “Deliveroo has gone from hero to zero as the much hyped stock market debut falls flat on its face. It had better get used to the nickname ‘Flopperoo’.”
The share price fall also hit 70,000 Deliveroo customers who took up the
company’s offer to buy £50million worth of shares.
Lee Wild, at Interactive Investor, said: “It’s been a disastrous stock market debut for Deliveroo.”
TUC general secretary Frances O’Grady said: “It’s a damning indictment of the company’s exploitative business model that so many major funds have publicly shunned this float.”