Deliveroo Stock Market Float

Can’t help but think that once Corona restrictions are over, any shares with Deliveroo will just tank.

Sure they’ll be some demand for takeaways still, but most people will just flood to the restaurants, sandwich bars, McDonald’s etc in person.

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Sounds like they already have. The FT says they plunged 30%, as low as 271p but recovering slightly to 298p.

Another company with rubbish fundamentals tries to float. WeWork anyone…

WeWork never floated though. :sweat_smile: So, not directly comparable, also not a similar industry. A valid point though.

The best comparison is the reverse IPO of Doordash that took place. Their stocks plummeted as well.

Fundamentally, this collapse doesn’t surprise me, there’s a lot of uncertainty (especially in the UK) with regards to the Gig economy and how that impacts on companies etc. Also, there’s a lot of concern that Deliveroo’s recent “boom” has been more tied to the restrictions of Covid and so they’ll return to an increasing loss making company longer term when restrictions lift allowing direct restaurant visitation etc.

One to watch, but IPOs have now become a way for a company to raise money, without doing a private fund raise round etc…

To add, I read that WeWork are looking to float again soon though!

They’ll fall even more once lockdown is lifted. The majority of people want to be back to normal which means eating out, now we’re in summer (nearly) that’ll be amplified even more.

If they can’t make a profit when restaurants are exclusively operating by delivery/takeaway etc, and they pay their workers a pittance, they’ll never make a profit imo

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No, but they certainly tried, despite never being on a sound financial footing to begin with.

Also, I’d argue that the industries aren’t that dissimilar. WeWork rents out buildings, Deliveroo rents out humans. They’re both tech-focussed entities with questionable balance sheets though! :slight_smile:

The difference is that WeWork was never actually a tech company. They were just a fancy Regus, with massive long term leases on their balance sheet and no real way to monetise them significantly better than their competitors.

Deliveroo is much more of a tech company in the build it once, capture demand and then leverage it to control supply fashion.

I don’t think they’re that similar businesses. But I do think there’s quite a bit of uncertainty around Deliveroo’s unit economics given the ethics and legality of the gig economy.