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Deliveroo plummets 30% when its 10-year debut is raging by Reuters

© Reuters.File Photo: Deliveroo Delivery Rider Cycle in London, UK

By Abhinav Ramnarayan and Julien Ponthus

London (Reuters)-Deliveroo shares plunged 30% on Wednesday’s trading debut, hitting the London market for food delivery groups and initial public offerings (IPOs), cutting more than £ 2 billion from company valuations ).

The long-awaited list is the largest in the London market in 10 years, and UK Finance Minister Rishi Sunak can pave the way for IPOs to grow by fast-growing tech companies in the “True UK Technology Success Story” Was welcomed as.

However, the debut has already been overshadowed by some of the UK’s largest investment firms refusing to go public due to concerns about the working conditions and equity structure of the gig economy.

The 390 pence price tag gave an overall valuation of £ 7.6 billion ($ 10.46 billion) and was already at the bottom of the initial range.

Within minutes of opening the market on Wednesday, it lost a value of £ 2.28 billion. This said a senior equity capital market banker would hit the initial public offering markets in the UK and Europe.

“It’s one of the most anticipated IPOs of the year and a very painful move,” he said, asking him to remain anonymous.

Pandemic boom

Deliveroo’s self-employed drivers saw a surge in demand during the COVID-19 pandemic, bringing food to customers who were otherwise locked up from closed restaurants.

However, Amazon-backed companies are losing a lot of money. He said he reduced the underlying loss from £ 317.3 million in 2019 to £ 223.7 million ($ 389 million).

Growth companies made a fuss last year, regardless of profitability, as interest rates fell due to the COVID-19 crisis and government bond yields fell to record lows.

But as US Treasury yields have risen, the deal has become less attractive, and many tech stocks on both sides of the Atlantic have fallen in recent weeks, raising questions about rising valuations.

“It goes back to the question of why a company valued at 3 billion (pounds) in November and 5 billion in January is magically worth 8-9 billion in March. Need for urgent funding. ”

Founded by boss William Shu in 2013, the list of London-based companies is London’s largest IPO since Glencore (OTC :) in May 2011 and the largest technology ever on the London Stock Exchange. It’s also a float.

Heavyweight investors who were away included Aberdeen Standard life (LON :), Aviva (LON :), Legal & General Investment Management and M & G.

“The number of institutions lined up to say no for ESG (environment, society, corporate governance) reasons always seems to be a tricky debut,” said James Assy, investment director at Aberdeen Standard Investments. “.

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Deliveroo plummets 30% when its 10-year debut is raging by Reuters

https://www.investing.com/news/technology-news/deliveroo-shares-tumble-in-london-debut-2462075 Deliveroo plummets 30% when its 10-year debut is raging by Reuters

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