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Deliveroo crashes 10% to new low as stock market woes continue

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
Deliveroo riders from the Independent Workers' Union of Great Britain (IWGB) in the City of London, as they go on strike in a dispute for fair pay, safety protections and basic workers' rights. Picture date: Wednesday April 7, 2021.
Deliveroo riders from the Independent Workers' Union of Great Britain (IWGB) in the City of London, as they go on strike in a dispute for fair pay, safety protections and basic workers' rights. Photo: PA (PA)

Deliveroo's (ROO.L) public market woes continued on Friday as the company's share price fell to a new all-time low.

The takeaway app's stock was routed, closing down 9.7% at 254.50p. It marked the lowest price since the company listed last week.

Friday's slump was out of step with the broader market. The FTSE 100 (FTSE 100) closed down just 0.3% while the FTSE 250 (^FTMC) was flat. Rival Just Eat Takeaway (JET.L) ended Friday up 0.4%.

A spokesperson for Deliveroo declined to comment.

Deliveroo's stock sunk to new all-time lows on Friday. Photo: Yahoo Finance UK
Deliveroo's stock sunk to new all-time lows on Friday. Photo: Yahoo Finance UK (Yahoo Finance UK)

The dire performance caps a dreadful first week on the stock market for Deliveroo, which was expected to be one of the hottest listings of the year but has been roundly rejected by the City of London.

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Investment banks sold Deliveroo's shares at 390p a piece in the takeaway app's initial public offering. The price promptly dropped as much as 30% when trading began on the stock exchange, burning 70,000 retail investors who bought into the IPO via platform PrimaryBid.

WATCH: Deliveroo riders set off flares outside company's London HQ in strike over pay and conditions

Deliveroo's stock recouped some of the losses in the days that followed but Friday's decline means the shares are now once again around 35% below their offer price. Deliveroo is currently valued at £4.4bn, compared with the £7.6bn valuation investment banks slapped on it during the listing.

Those close to the float have blamed the disastrous performance on market conditions and short sellers, although public disclosures with the regulator do not show any short interest in the stock. Outside observers believe the banks working on the Deliveroo float overvalued the company.

Major investors were also turned off by the company's governance structure and risks around the way Deliveroo classifies its delivery drivers. Couriers this week went on strike to protest for better pay and working conditions.

Some of the City of London's biggest investment firms — including Aviva (AV.L), M&G (MNG.L) and L&G (LGEN.L) — all publicly said ahead of the IPO that they would not take part due to their concerns, which limited its pool of potential buyers when the stock began to trade.

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