Would you buy shares from Ocado?

Spark

I like shopping with Ocado, and I find they have the best customer service but I am surprised that they have never made any profits.
But the information I have gathered so far, combined with my gut instinct tell me to pass on that offer of buying shares from them
Thank you all for your input.

competitionscafe

This article makes interesting reading:

Ocado IPO: Don't touch it with a bargepole
http://www.moneyweek.com/investment-advice/ocado-ipo-heist-02802.aspx

Also:
http://www.guardian.co.uk/business/2010/jul/15/ocado-supermarkets

http://www.efinancialnews.com/story/2010-07-08/ten-questions-for-ocado

http://ftalphaville.ft.com/blog/2010/07/08/281516/to-michael-gradeocado-com/

leahciM

Um... a company that has never turned a profit and only has ONE source of revenue - if Waitrose drop them they got nothing...


Think I'll pass.

turbobob

Probably wise to have given this one a miss - http://www.bloomberg.com/news/2010-07-21/ocado-raises-565-million-in-ipo-after-reducing-price-to-180-pence-a-share.html

premierfella

I am only surprised it hasn't fallen further already. Nothing against the company, but the valuation is wrong - investors (even us small fry) expect some reward for taking on risk, and there is surely still too little reward in the 180p price.

bendix

PaulB75 wrote: »

I'm thinking about doing this as well, as a first time share buyer. This maybe a naive question, but it's related to initial post - do IPO's virtually always go up on first day of trading, or are they often over-priced initially and can drop like a stone?

If you went into Waitrose, would you buy a tin of food which had no label and you had no idea what was in it? Of course not.

No offence, but you seem to have no clue what buying shares is about, so why buy something you know nothing about?

competitionscafe

"The company reserved up to 15 million pounds in fees for bankers, public relations firms, lawyers and accountants"

It's obvious who the real winners (apart from the founders) are from this IPO.


"One retail analyst, Philip Dorgan, at Ambrian, said recently that a fair valuation would be less than £500m, suggesting a price of about 120p a share."
http://www.bbc.co.uk/news/business-10708803

joeypesci

I'm far from an expert in shares. But I worked for Waitrose for 6 years a while back. Towards the end of my years they used this company to deliver their goods. However, I've seen more and more Waitrose vans around now. So they maybe looking to eventually drop Ocado and use their own vans. So then what would happen to Ocado?

joeypesci

bendix wrote: »

If you went into Waitrose, would you buy a tin of food which had no label and you had no idea what was in it? Of course not.

Depends as it would be discounted due to the missing label

I'll get my coat.