Business

Deliveroo sees shares fall by 30% in market debut

Reports last week suggested that a number of investors were shying away from investing in Deliveroo ahead of its stock exchange debut, after a surveyed report claimed that a third of its riders were paid less than minimum wage

Shares in Deliveroo sank by as much as 30% as it made its London Stock Market debut, going as low as 275p per share and wiping over £2bn off its valuation

In a market announcement this morning, Deliveroo said the offer price has been set at £3.90 per share, equating to a market capitalisation at admission of £7.59bn – just last week it was estimated at £8.8bn. 

Since the fall shares have since climbed back to just over 300p per share.

Reports last week suggested that a number of investors were shying away from investing in the delivery app ahead of its stock exchange debut, after a surveyed report claimed that a third of its riders were paid less than minimum wage.

It is thought that some of the industries biggest investors, such as Aberdeen Standard and  Aviva Investors, decided against partaking in the scheduled listing due to the concerns over the report as well as the share structure which gives its founder Will Shu greater voting control.

In addition to their initial offer, a further 38,461,538 shares in the company are being made available. If exercised in full, it will increase the offer size to approximately £1.65bn, representing approximately 22.9% (423,076,922 shares) in total and of Deliveroo’s issued share capital at the time of admission.

Will Shu, founder and CEO of Deliveroo, said: “In this next phase of our journey as a public company we will continue to invest in the innovations that help restaurants and grocers to grow their businesses, to bring customers more choice than ever before, and to provide riders with more work.

“Our aim is to build the definitive online food company and we’re very excited about the future ahead.”

Admission of the company’s shares to the London Stock Exchange is expected to commence on 7 April 2021.

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