Deliveroo sinks more than 30% on its debut day on the London Stock Exchange
The shares of Deliveroo, an online food delivery company, fell 30.50% on the first morning that they trade on the London Stock Exchange, on what is the worst debut in several decades for a British company after an IPO – Initial Public Offering – of large dimensions.
The size of the fall was such that trading was suspended twice, a week after the company raised $2.1 billions from the IPO, in an operation led by Goldman Sachs and JP Morgan.
But the size of this fall does not seem to have surprised some analysts, cited by Bloomberg, since Deliveroo presents several obstacles regarding the rights of its workers, which are not in line with responsible investment practices and can be an obstacle for their success.
A large demonstration organized by its workers, who are asking for better working conditions and higher wages, is already scheduled for next week.
The home delivery company put more than 256 million new shares into circulation at $5.36 each, plus the 128 million shares that the shareholders who were in the company before the IPO were considering selling.
One of these shareholders is the online retail giant Amazon, which currently holds a 15.8% stake in the company, but will reduce it to 11.5% after selling more than 23 million shares it holds. At the current price, this amount of shares can amount to more than $96 million.
Orders for delivery on the platform grew 64% in 2020, year on year, but the company has not yet managed to turn this growth into profit.