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Mentions the $650mln they'll pay Just Eat for it, neglects the fact Just Eat paid $7.3bln. Quite the write down. And in just 4 years.
by jaymzcampbell 2y ago
Mentions the $650mln they'll pay Just Eat for it, neglects the fact Just Eat paid $7.3bln. Quite the write down. And in just 4 years.
- popcalc 2y agoWhere did all the money go?
- schmidtleonard 2y agoLowered expectations.
- Retric 2y agoEarlier investors. Ever hear of pump and dump? After you sell you’re insulated from future performance as long as you don’t commit actual fraud etc.
- JumpCrisscross 2y ago> Earlier investors. Ever hear of pump and dump? When did GrubHub buy early investors' shares with company cash?
- Retric 2y agoEarly investors had already “sold” the company well before this transaction: https://about.grubhub.com/news/grubhub-stockholders-approve-transaction-with-just-eat-takeaway-com/ https://about.grubhub.com/news/grubhub-stockholders-approve-... It was an all stock transaction, so they maintained an indirect stake but it was significantly diluted: https://en.wikipedia.org/wiki/Just_Eat_Takeaway.com https://en.wikipedia.org/wiki/Just_Eat_Takeaway.com Meanwhile Just Eat Takeaway investors got taken for a ride.
- lotsofpulp 2y agoThis does not seem like pump and dump: https://www.investopedia.com/terms/p/pumpanddump.asp https://www.investopedia.com/terms/p/pumpanddump.asp
- Retric 2y agoThe degree to which startups with unsustainable business models can be called pump and dump schemes is debated. I wasn’t suggesting they committed fraud, but they definitely put their best foot forward before that transaction and believed it was in their interest to sell. https://en.wikipedia.org/wiki/Pump_and_dump https://en.wikipedia.org/wiki/Pump_and_dump Also it’s not just unrelated 3rd parties, Enron was included because: “Enron falsely reported profits which inflated the stock price, they covered the real numbers by using questionable accounting practices. Twenty-nine Enron executives sold overvalued stock for more than a billion dollars before the company went bankrupt.”
- rpcope1 2y agoWell, when you're in the business of selling a dollar for eighty cents, all the money probably got flushed down the toilet.
- y1n0 2y ago[dead]
- darth_avocado 2y agoYou get $10/month dining credits if you’re an Amex card holder. Imagine the cost of all promotions.
- hunter2_ 2y agoI always wondered if the promotions were handled with restaurants more like "we (the platform) recoup our promo losses via the regular platform fee you (the restaurant) pay regardless" or more like "if a customer uses a promotion, we (platform and restaurant) split the loss, unrelated to the regular platform fee". Like when I use a platform promo for reasons well beyond trying a new place for the first time, am I screwing the restaurant, the platform, or some combination?
- eszed 2y agoMostly the restaurant, at least in the case of these companies' "free delivery" membership deals. Restaurants pay a higher commission on those orders. (Whether that's enough to outweigh the operating deficit built into their current pricing I have no idea, but some fraction is being passed along to their merchant "partners".)
- 0x0000000 2y agoHow were they selling a dollar for 80 cents? The actual food is more expensive on grubhub than ordering through the restaurant, and then there are multiple fees on top of that.
- 2y ago
- deprecative 2y agoWhere it always goes, to the top.
- munnywiz 2y ago[dead]
- fakedang 2y agoFAANG salaries and freebies.
- jonny_eh 2y agoFAANG wasn't involved at any point
- robertlagrant 2y agoBut FAANG-level salaries, right? To compete?
- jonny_eh 2y agoThat's called fair market compensation.
- robertlagrant 2y agoI'm not saying it's not. Please read the previous comment for context.
- fsckboy 2y ago>Where did all the money go? all of it, including its future, was valued at $7 billion, but there was never $7 billion in cash. Maybe it was $700 million in cash paid for 10% of it, which would value the whole thing at $7 billion. If that totally-made-up 10% number happens to be the right number, then it hasn't lost much at all overall, but the investor who paid that has to share the sale price with a bunch of other shareholders who paid less. So, this owner lost money, but the firm did not necessarily. (I'm not saying this is what happened, and maybe a quick google would get us closer to the actual numbers, I'm just saying you have to pay attention to the wording of what is being claimed; media likes to exaggerate.) what has disappeared is "belief in the future prospects of this company to bring in profits worth $7B" which was why the last investors invested, and why the early investors set up the kitchens and other frameworks to support those hopes. And it's not that the opportunity wasn't a good one, perhaps a competitor "won", or perhaps there are too many competitors trying to share the $7B pie.
- that_guy_iain 2y agoThe 7.5 billion? To the company that previously owned Grubhub. I believe that's how much Just Eat paid for it. Where did the valuation go? Doordash and Uber Eats managed to eat them alive.
- Yeul 2y agoThis is a winner takes all market. They spend it on becoming the US leader. Every country has one platform that wins, everyone else loses the billions. There's no second place.
- paulddraper 2y agoThere's zero reason for it to be winner take all. UberEats, DoorDash, whoever
- mikequinlan 2y agoThey are actually paying $150 mln in cash and taking on $500 mln in debt.
- xeromal 2y agomulti level narketing
- that_guy_iain 2y agoIt's kinda funny since they beat Uber in the bidding war and Uber is probably one of two reasons why it's only worth 650 million now.