Deliveroo IPO – Worth a punt?

ErinGoBrath

doe808 said:

Does it have a ticker yet?

ROO apparently.

strawb_shortcake

It's been nicknamed flopperroo hasn't it

underground99

Alexland said:

If anything I find comfort in the failure of this IPO that the market has not lost all sense.

The headlines will probably say the IPO was a flop, but in reality it was a very good result for the company as they were able to place the shares at 390p even though most of the market didn't want them at that price. So they'll have netted more than what the market ultimately thinks it's fair to pay.  You tend to read in the papers that the investment bankers have done a great job if it's a successful debut that goes up a lot, but if the investment bankers are maximising proceeds for the issuer and the selling shareholders it shouldn't need to go up too much at all. People just like to see it go up so they get confidence to invest in other new issues from the same company or intermediary.

Worth noting that quite a lot of stocks have had bad starts.  Facebook for example IPO'd at $38 but was at $18 only four months later. Uber came to market at $45 and within five months was down to $27 in late 2019, even pre pandemic. But by now Uber is back over $53 and FB came good in the end (nine years on, it's 10x higher than that initial low).

Of course it could just do an Aston Martin and keep on falling  

Alexland

underground99 said:

The headlines will probably say the IPO was a flop, but in reality it was a very good result for the company as they were able to place the shares at 390p even though most of the market didn't want them at that price. So they'll have netted more than what the market ultimately thinks it's fair to pay.

Yes I agree with you on that basis the owners will have done very well regardless of what happens to the share price. It reminds me how estate agents don't really care at what price they sell your house as they get the majority of their money from the fact it has sold.

underground99

Alexland said:

underground99 said:

The headlines will probably say the IPO was a flop, but in reality it was a very good result for the company as they were able to place the shares at 390p even though most of the market didn't want them at that price. So they'll have netted more than what the market ultimately thinks it's fair to pay.

Yes I agree with you on that basis the owners will have done very well regardless of what happens to the share price. It reminds me how estate agents don't really care at what price they sell your house as they get the majority of their money from the fact it has sold.

Yes, a family member is going through a house sale at the moment. The selling agent will maybe make a percent or so.  You might want to see if you can play hardball and get the buyer to stump up another £1k, but the agent is only going to make an extra tenner if he gets you that £1k and would much rather get the deal done without risking the sale, so he's probably minded to say 'let's just get it done' at the current price rather than getting you the best possible result achievable.

Malthusian

underground99 said:

Yes, a family member is going through a house sale at the moment. The selling agent will maybe make a percent or so.  You might want to see if you can play hardball and get the buyer to stump up another £1k, but the agent is only going to make an extra tenner if he gets you that £1k and would much rather get the deal done without risking the sale, so he's probably minded to say 'let's just get it done' at the current price rather than getting you the best possible result achievable.

Taking the current price is the best possible outcome if the probable result of trying to get another £1,000 by playing silly buggers is that the buyer pulls out, leaving you with the 2nd best offer. Nobody wants to buy a house from someone who will probably cause them months of grief and try to gazump them, unless there's no other option.

underground99

Malthusian said:

underground99 said:

Yes, a family member is going through a house sale at the moment. The selling agent will maybe make a percent or so.  You might want to see if you can play hardball and get the buyer to stump up another £1k, but the agent is only going to make an extra tenner if he gets you that £1k and would much rather get the deal done without risking the sale, so he's probably minded to say 'let's just get it done' at the current price rather than getting you the best possible result achievable.

Taking the current price is the best possible outcome if the probable result of trying to get another £1,000 by playing silly buggers is that the buyer pulls out, leaving you with the 2nd best offer. Nobody wants to buy a house from someone who will probably cause them months of grief and try to gazump them, unless there's no other option.

Fair point.  I just wonder if the agent might perform better if their incentive arrangement gave them more of the upside (once some threshold level had already been achieved for the buyer). I suppose you really want their interests to be aligned with yours rather than be self-interested. 

csgohan4

rather invest in Abnb than this. Least the former has space to grow

aroominyork

underground99 said:

Malthusian said:

underground99 said:

Yes, a family member is going through a house sale at the moment. The selling agent will maybe make a percent or so.  You might want to see if you can play hardball and get the buyer to stump up another £1k, but the agent is only going to make an extra tenner if he gets you that £1k and would much rather get the deal done without risking the sale, so he's probably minded to say 'let's just get it done' at the current price rather than getting you the best possible result achievable.

Taking the current price is the best possible outcome if the probable result of trying to get another £1,000 by playing silly buggers is that the buyer pulls out, leaving you with the 2nd best offer. Nobody wants to buy a house from someone who will probably cause them months of grief and try to gazump them, unless there's no other option.

Fair point.  I just wonder if the agent might perform better if their incentive arrangement gave them more of the upside (once some threshold level had already been achieved for the buyer). I suppose you really want their interests to be aligned with yours rather than be self-interested. 

Indeed. I was recently selling my father's home and tried to get the agent on a deal where they would take 10% above a threshold. They simply were not interested in the conversation.

DoctorStrange

Am I missing something,  but with the new off-payroll rules (IR35) hitting the private sector next week,  isn't Deliveroo sitting on a massive risk of  HMRC calling for ENIC, PAYE and NIC for its riders, regardless of whether the Supreme Court ruling on Uber provides employment rights?

There's no way these "self employed" riders are "Outside IR35" IMO and the liability shifts to Deliveroo next week.