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Deliveroo to offer 50M pounds of stock to customers
- gogopuppygogo 6y agoIf the delivery as a service model was unprofitable at the height of a global pandemic when it was a necessity how does this business model ever achieve profitability.
- thom 6y agoA charitable theory would be that a large amount of their stock comes from restaurants, many of which (but obviously not all) were closed, as opposed to takeaways, which largely continued operating as normal.
- mytailorisrich 6y agoActually many restaurants that would have completely closed continued to operate only through Deliveroo and others.
- barbegal 6y agoI really hate the idea of using a food delivery app to promote a complicated financial product. Retail investors will only be able to purchase IPO shares through the app after making a purchase through deliveroo so maybe they are just trying to use this as a small promotional tool for the app.
- bidirectional 6y agoWhat's the complicated financial product? It's just equity.
- lazide 6y agoEquity is one of the most complicated (and easiest to mislead buyers with) financial product out there? Are the books cooked? Who knows. What are the share classes, and how do they relate to each other? Who knows. What are the bylaws, and how is board composition determined? Who knows. All of these are huge. People get misled by far simpler products (like loans) all the time, let alone something like this.
- ahepp 6y agoUsually when people talk about "complicated financial products" they mean some kind of derivative. Yes, you can cook the books. That doesn't make the product complex. It is fair to point out that some tech IPOs (We work comes to mind) had pretty sketchy corporate structuring and stock classes. But I don't think there's any simpler financial product than equity. You can do the same kind of financial engineering with bonds. Do you really know what's in the covenant? Is there even a covenant to speak of? People have been getting burnt for decades now by companies finding creative ways to separate the collateral from the loan.
- mattmanser 6y agoHow's this different to brewdog selling shares to its customers? They've been doing that for years, you get a free beer on your birthday, etc. Been successful for them and their customers. Wouldn't be too surprised if they directly inspired deliveroo to do the same, that someone in Deliveroo's UK head office is a brewdog shareholder and suggested it off the back of that. They seem to be trying to build a similar kind of brand.
- leipert 6y agoYou got me so excited. But then reading through the fine print, I realized my excitement is about three months too late. > Therefore, subject to the following paragraph, the Offer will be closed in all of the Approved Jurisdictions, except for the United Kingdom, on and from 10:59 p.m. (GMT) on 31 December 2020 ("EU Closing Date"). One needs to reside in US, AU, UK, Ireland or Spain? to be able to participate.
- nixass 6y agoDeliveroo is one of prime examples what's wrong with gig economy and why it should be heavily regulated. Same as Doordash, they're disastrous for local food business'
- dash2 6y agoI would think that in my city, most restaurants would have struggled to survive through lockdown without Deliveroo and similar services.
- TeMPOraL 6y agoIn other words, it took a global pandemic to turn these businesses into net positive for society. Temporarily.
- Spivak 6y agoI don’t get this level of cynicism. Like they’re a delivery company. People give them monies for someone to deliver food, restaurants give them monies for lead generation and delivery, both parties are happy enough with the transaction to actually do it. Yeah they’re middlemen squeezing customers, drivers, and restaurants but that’s basically all business. I really enjoy using these services. I went from having pizza and American-Chinese food delivery to having every restaurant in a 15 mile radius. It’s so nice when I’m low energy, having people over, whatever to order better food than chain pizza.
- leppr 6y agoThe service in itself is alright, but the 35% cut Deliveroo and Uber Eats take is just too much. It's a very inefficient business. My orders are very often wrong, and they simply refund the whole order. Then the next time I order they get it wrong again and I get refunded again. With Just Eat or direct restaurant delivery, the issue would get resolved on the spot. There's just no need for such a fat middleman between restaurants and customers. The only reason I'm using it is to exploit the delivery mispricing and promotions, like Uber in its early days.
- mnd999 6y agoOr are they peddling their overvalued shares to unsophisticated investors?
- bellyfullofbac 6y agoSmells like it, they probably want to GME themselves. I remember reading someone's opinion how the current SV companies are basically ponzi schemes (e.g. WeWork), the big institutional investors hype them up and get the first stocks, retail investors would come in next, and the big institutions can then cash out. I wish I can remember where I read this...
- llampx 6y agoI have read this too a long time ago, and it always struck me as true. That's why I stopped wanting to invest in new IPOs. You're not "getting in on the ground floor" with them, they're usually for sale a few months after the IPO. Look at SNOW and ABNB for recent examples or GPRO for one from a while ago.
- bidirectional 6y agoNo, they are clearly not, and that's a very strong accusation to wantonly throw around. It's a 7.5 billion dollar IPO, this represents less than one percent of that.
- deft 6y agoThis kind of offering is only a very small step above a straight up ponzi scheme. We are at the top of the bubble and no one knows what to do with their dollars that are rapidly losing value. Order your shitty fast food and get a discount on your shitty stock.
- Cola 6y agoWhat do you mean by “dollars that are rapidly losing value”?
- deleted 6y ago[deleted]
- danieldisu 6y agoThey are implying that we inflation is rising (even if the official numbers doesn't say so) because of the actions of the Fed
- ALittleLight 6y agoIs there an analogous situation in the UK?
- dfgdghdf 6y agoThe UK government must be more careful with inflation than the US government because the pound is not a serious reserve currency used across the world as the US dollar is. That said, the UK government has borrowed significantly to pay for coronavirus relief programs.
- atian 6y agoRemember that humans can actually reproduce rapidly to introduce workable productivity many times over in a lifetime if needed. We are in a bubble of luxuriance.
- Invictus0 6y agoWow, that's some heavy news!
- Gaelan 6y agoAmusingly, this headline is ambiguous: are they giving their customers £50m worth of shares, or 50M lbs of food (that they have in stock)?
- brian-armstrong 6y agoIt's 50M pounds of soup stock. Hope you like tomato bisque.
- ALittleLight 6y agoI had this same confusion. It's £'s of shares.
- asperous 6y agoThis is based on the narrative that IPOs are systematically underpriced and those able to participate walk away with gains as a rule. If IPOs are actually accurately priced or overpriced, then this doesn’t benefit customers in any way. With that in mind it seems much more likely to me this is just a way to push the stock. Retail trading is booming [1]. I hope this leads to financial literacy and more people benefiting from democratic ownership of capital (more profits going to worker class). https://finance.yahoo.com/news/retail-investor-stock-market-rally-morning-brief-100911587.html https://finance.yahoo.com/news/retail-investor-stock-market-...
- bombcar 6y agoThe last few times retail trading was booming didn’t work out so well for the retailers. The traders did well, however.
- chii 6y ago> This is based on the narrative that IPOs are systematically underpriced IPO's that are systematically underpriced are the ones that aren't available to the general public (i.e., an allocation offering for private, accredited investors). It is likely that any IPO allocation available to the public is not underpriced, but at most priced correctly, and usually more likely to be over-priced!
- Traster 6y agoLike many others, I don't think this is a particularly smart idea for investors. If you think the company is worth investing in then invest. If you want take-away tonight order take-away. There is no reasont to conflate those two decisions. This does remind me of the Burrito Bond though - I used to eat at Chillango whilst they were trying to get people to buy their burrito bond, and always found it hilarious - lending money to a retail restaurant chain always seemed like an absurdly high risk low reward choice. Administrators are now offering those bond holders 10pence on the pound. Seems a lot like a scam being dressed up as "innovation"