Shares in Deliveroo tanked today, wiping £1.8billion from the tech takeaway firm’s value as it made its long-awaited stock market debut.
The listing price of 390p per share valued the company at £7.6billion, which was at bottom end of the delivery firm’s initial pricing range following an investor backlash over staff working conditions.
But on the London open shares plunged 30 per cent to 271p, before recovering some of the losses to stand 95p down at 295p – a fall of 24 per cent on the opening price of thge float.
Strong demand for Deliveroo’s float has been overshadowed in recent days by criticism from heavyweight investors over the status of tens of thousands of the firm’s delivery riders
It was London’s biggest listing for a decade, raising around £1billion for expansion efforts. Chancellor Rishi Sunak, hailed Deliveroo’s decision to go public in London as a ‘true British tech success story’.
Initially strong demand for the float was overshadowed by criticism over the status of tens of thousands of Deliveroo delivery riders.
As big funds including Aberdeen Standard Life, Aviva and M&G said they were sitting out the listing, the firm abandoned its price target of 460p for a more conservative 390p.
It means its valuation fell from an upper projection of £8.8billion to £7.6billion, with founder Will Shu’s payout for selling shares down from £30.8million to £26.2million.
His remaining stake afterwards will be worth £449million.
At the centre of concerns is the status of Deliveroo’s riders as ‘self-employed’, meaning they are not entitled to the minimum wage, holiday pay or sick leave.
There are fears that it could face an employment rights crackdown akin to Uber, which was forced to overhaul how it pays taxi drivers.
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