Deliveroo IPO – Worth a punt?

Moe_The_Bartender

Voyager2002 said:

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).

Good plan. It’s at its cheapest since 2017.

jamei305

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.

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.

I think the big asset managers are concerned about the dual-class share structure and just how sustainable the business model is, rather than by moral concerns over the gig economy.

Personally, a bunch of people on bikes delivering takeaways doesn't excite me so I'll be staying away. It's not like they have any special assets, moats, USPs, patents or anything special at all (including profits, which they also have never had).

underground99

jamei305 said:

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.

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.

I think the big asset managers are concerned about the dual-class share structure and just how sustainable the business model is, rather than by moral concerns over the gig economy.

Personally, a bunch of people on bikes delivering takeaways doesn't excite me so I'll be staying away. It's not like they have any special assets, moats, USPs, patents or anything special at all (including profits, which they also have never had).

Although they maybe don't have a traditional 'moat' per se, there are some practical barriers to entry if you tried to launch a competitor in the same space at scale tomorrow you would probably find it pretty tough given you would be starting from scratch while Deliveroo, Ubereats and Just Eat have already carved up much of the high-population areas between them and have huge swathes of customer data to inform their algorithms. Drivers and restaurant partners could of course defect to a higher paying / lower charging competitor, but it's less likely that someone is going to suddenly launch at scale with massively more competitive rates in a market that already has one or two of the big three names. The fact they (like Uber) are not profitable yet shows how you would need to have very deep pockets to muscle in and compete.  You are right that it's perhaps surprising that they don't have clever patents (i.e. that they don't have anything they want to 'protect') but one might generously think that this was because they didn't want to have those 'trade secrets' and methods out in the public domain...

As with Malthusian I will have a punt on this with perhaps some short term potential from the army of millennial investors getting on board upon listing - if it has an early price rise it would seem to be worth cashing it in before all the other people using the 'customer offer' seek to cash-in their windfalls.

mooneysaver

As everyone else has pointed out, these shares are basically a licence to print money.

edgex

Ash_Pole said:

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

Ocado are a technology company, with a lot of IP in robotics & warehouse automation.

Just Eat are largely providing a front-end ordering system for places that already do their own deliveries, so they don't have such a big concern about delivery drivers/cyclists being employees or not.

Moe_The_Bartender

mooneysaver said:

As everyone else has pointed out, these shares are basically a licence to print money.

I didn’t point it out. The licence to print money will only benefit the current owners. If it was such a great offering, why is it being shunned by the likes of BMO Global, Aberdeen Standard, Aviva Investors, L&G, CCLA, Baillie Gifford and M&G?

george4064

Conditional trading started at 8am today, shares changing hands for around 325p a share which is approx 17% below the IPO price of 390p.

Edit: Now at 300p, approx 23% lower.

Edit2: I think its now trading around 262p, 33% lower.

underground99

You can spreadbet it at around 299-300p at the moment with IG

(am long from 303p)

mooneysaver

Moe_The_Bartender said:

mooneysaver said:

As everyone else has pointed out, these shares are basically a licence to print money.

I didn’t point it out. The licence to print money will only benefit the current owners. If it was such a great offering, why is it being shunned by the likes of BMO Global, Aberdeen Standard, Aviva Investors, L&G, CCLA, Baillie Gifford and M&G?

Agreed it is a brilliant investment, however I suspect these shares are likely to become like hen's teeth so very difficult for the average investor to get in on the gravy train.

underground99

mooneysaver said:

Moe_The_Bartender said:

mooneysaver said:

As everyone else has pointed out, these shares are basically a licence to print money.

I didn’t point it out. The licence to print money will only benefit the current owners. If it was such a great offering, why is it being shunned by the likes of BMO Global, Aberdeen Standard, Aviva Investors, L&G, CCLA, Baillie Gifford and M&G?

Agreed it is a brilliant investment, however I suspect these shares are likely to become like hen's teeth so very difficult for the average investor to get in on the gravy train.

I think you are completely misunderstanding Moe's point as he's not agreeing it's a brilliant investment nor licence to print money going forwards.  The lack of demand from institutional investors has caused it to be trading at 25% below the IPO price (which was itself the very bottom of the proposed pricing range), it doesn't seem like the shares are going to become as rare as hen's teeth.