Shares of British food delivery company Deliveroo plunged in their stock market debut.
The disappointing initial public offering (IPO) has been blamed on the fact that Deliveroo faces pressure from top investors and trade unions over workers’ rights.
Shares of Deliveroo, which is backed by Amazon (NASDAQ:AMZN), fell 30% in early trading Wednesday before paring losses. The company had priced its shares at £3.90 ($5.36 U.S.), giving it an expected market value of £7.59 billion, which was at the bottom end of its IPO target range.
But the company’s share price was down to £2.73 shortly after trading in the stock began on the London Stock Exchange. This wiped out approximately £2 billion off the company’s valuation.
Deliveroo is selling 384,615,384 shares, equating to an offer size of approximately £1.5 billion.
The company’s shares began trading in London under the ticker symbol "ROO." JPMorgan and Goldman Sachs led the listing, while Bank of America, Merrill Lynch, Citibank, Jeffries and Numis were also part of the IPO.
Deliveroo’s IPO is the largest in the United Kingdom since e-commerce firm The Hut Group raised £1.88 billion in a listing held in September 2020. In terms of market capitalization, it is the biggest IPO to take place in London since Glencore went public nearly a decade ago.
Deliveroo is also Britain’s largest-ever technology listing by value, surpassing that of Worldpay which debuted in 2015. However, the IPO has been hurt by concerns over Deliveroo’s treatment of its gig economy drivers, as well as the company’s governance and valuation.
