Deliveroo IPO – Worth a punt?

block10

So i received an unsoliticed email, advertising the Deliveroo IPO via broker PrimaryBid. I was wondering if it was worth a punt? Personally it looks to be a crowded marketplace with the likes of UberEat, Justeat etc.

£50m of shares available for Deliveroo customers

When the time comes and customers are able to apply for shares, we want to enable the maximum number of customers to participate. You can apply for £250, £500, £750 or £1,000 of shares.

David713

Personally, I wouldn't touch it.
Despite the on & off lockdown over the past year, something that has seen a huge surge in demand for food deliveries, Deliveroo still managed to make a loss of over £220 million.
If/when the pandemic is well under control and the lockdowns are finally lifted, there may well be a drop in demand for food deliveries as more people may want to eat out and if this does happen, Deliveroo will probably see their revenues drop to pre-pandemic levels or maybe even below these.

Another thing that could have a big impact on their potential future earnings is the legal status of their delivery drivers/cyclists.
At the moment, they are all classed as self employed so Deliveroo don't have to provide any holiday pay, sick pay etc but don't forget that until recently, this was also the case with Uber drivers until a Supreme court ruling determined otherwise.
The Dutch government recently declared that in their country, Deliveroo delivery staff are employees and not self-employeed so it's possible that the same may happen in other countries and if it does, it will mean that all staff will be entitled to the national minimum wage, sick pay, holiday pay etc and this will take a huge chunk out of their revenue.

Ash_Pole

Deadline for applications is looming. Is anyone buying in to this? Surprised there's not more discussion on here.

Nebulous2

Hold your nose and take a punt anyway? 
Deliveroo dampens IPO expectations as investors raise workers' rights concerns | Deliveroo | The Guardian

Do you think they have the wherewithal to make everyone employees and pay minimum wage, if a court obliges them to? 

Alexland

Ash_Pole said:

Surprised there's not more discussion on here.

It's just not very appealing paying billions for a company that might not scale well into less attractive geographic areas and has outstanding fundamental worker rights issues. Similar with Cazoo (which doesn't seem much different to Direct Line's JamJar.com a couple of decades ago) and is also apparently also worth billions but is having to use a SPAC to list because nobody believes the valuation on that either.

Ash_Pole

I'm having a punt. At £1,000 maximum it's not the biggest gamble and who knows, might be the next Ocado.

Albermarle

Ash_Pole said:

Deadline for applications is looming. Is anyone buying in to this? Surprised there's not more discussion on here.

There does not tend to be much speculation about individual shares / new opportunities on this forum .

Malthusian

Uncharacteristically, I am having a punt, but will dump the shares as soon as they are traded if it results in a quick profit, which I will then spend on my takeaway Easter Sunday lunch.

The big asset managers lining up to get all prissy about how they won't be investing in Deliveroo (despite having billions invested in China and any number of areas where people are much worse off than Deliveroo riders - gig economy bad, genocide good) is terrific news because it has caused the company to drop the initial price of the shares, leaving more room for an initial bounce.

If I lose hundreds of pounds then oh well. I don't usually do "just a bit of fun" investments but the logic of this one was too compelling. At least when I get bored of trackers I go in for something like this rather than Bitcoin or Gamestop.

dj1471

Malthusian said:

Uncharacteristically, I am having a punt, but will dump the shares as soon as they are traded if it results in a quick profit, which I will then spend on my takeaway Easter Sunday lunch.

I'm planning to do the same, though I may keep a token amount to hold long-term. Not convinced they'll ever see profit, but Amazon's stake suggests there may be a collaboration in the future which could change things. Even if that doesn't happen I reckon long-term they'll get bought out by Just Eat, Uber, or maybe even Amazon...

DireEmblem

There is a 50/50 chance you make the right decision, so toss a coin.

Voyager2002

I don't mind a bit of excitement but some risks are just too great. I am saving all my spare pennies to buy Evofem (EVFM).