Buy the dip: Deliveroo gets bump from retail investors keen to get a slice of the pie
Retail investors appear not to have lost their appetite for Deliveroo, with investors today pushing the price of Deliveroo stock close to where it first debuted on the London Stock Exchange.
By mid-afternoon on Wednesday the price of Deliveroo was up around two per cent, trading at around £2.86, down from £2.87 at its market debut.
The price is still considerably lower than the takeaway delivery app was hoping for when gearing up for its IPO, when it offered £3.90 per share.
Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said: “Retail investors don’t appear to have lost their appetite for Deliveroo despite the severe bout of indigestion suffered by the company when institutional investors began trading last week.
“By the end of the day yesterday, shares were down by 28 per cent from the IPO price, but this morning a surge of interest from retail investors, who could buy in for the first time, saw the company gain 4 per cent before falling back slightly.”
Streeter said the change in price would comfort Deliveroo customers who bought into the IPO early on, but have since been paralysed, watching a disastrous debut and unable to do anything about it.
Strike action
Deliveroo riders across the UK are on strike today over their pay and working conditions.
The industrial action, which has been organised by the couriers and logistics branch of the Independent Workers’ Union of Great Britain, will include socially distanced protests in London, York, Sheffield, Redding and Wolverhampton.
Riders are demanding a living wage, safety protections and basic workers’ rights, the union said.
Last month the Bureau for Investigative Journalism reported that Deliveroo pays some workers as little as £2 an hour, a revelation that prompted major investment firms to pull out of Deliveroo’s IPO, wiping around £1bn off its valuation.
In a statement Deliveroo said: “This small self appointed union does not represent the vast majority of riders who tell us they value the total flexibility they enjoy while working with Deliveroo alongside the ability to earn over £13 an hour.
“Only yesterday we ran a survey and 89 per cent of riders said that they were happy with the company and flexibility was their priority.
“We are proud that rider satisfaction is at an all-time high and that thousands of people are applying to be Deliveroo riders each and every week. Riders are at the heart of our business and today we are beginning a new consultation with riders about how we should invest our new £50 million community fund.”