İnvestor, Europe, London, Ipo, Stock

İnvestor, Europe

Deliveroo's flop a wake-up call for tech hopefuls

Deliveroo's flop a wake-up call for tech hopefuls

31/3/2021 11:10:00 PM

Deliveroo's flop a wake-up call for tech hopefuls

A dismal London stock market debut for Deliveroo, coming on the heels of other lukewarm listings, may be a sign that investors are becoming more ...

BookmarkLONDON: A dismal London stock market debut for Deliveroo, coming on the heels of other lukewarm listings, may be a sign that investors are becoming more discerning when it comes to buying shares in companies that have yet to turn a profit.Deliveroo, the biggest UK listing in a decade, plunged as much as 31 per cent after trading started on Wednesday, dealing a blow to London's hopes that more technology companies would be lining up to follow suit.

Police investigating woman who allegedly disregarded repeated advice to wear mask at MBS Short term visitors from South Asia make up fewer than 10 imported Covid-19 cases in last 28 days: MOH data 2-passenger limit for taxis, private-hire cars amid tightened Covid-19 restrictions

AdvertisementAdvertisementThe fate of the food delivery start-up was not an isolated case as investors have become more wary of record high stock market valuations and rising bond yields are fuelling concerns almost everywhere about so-called 'growth' stocks - companies promising fast growth but often with no profits to speak for.

A quarter of the top 20 equity listings of 2021, ranked by proceeds, are trading at or below their offer price.Recent market entrants in Europe include Polish e-commerce logistics firm InPost which debuted strongly in Amsterdam but is now trading 10 per cent below its listing price and online reviews platform Trustpilot which listed in London and fell below its offer price on its second trading day. Cloud platform DigitalOcean sank 12 per cent on its Wall Street debut last week. headtopics.com

Earlier on Wednesday, shares of Chinese tech company Bairong slumped 16 per cent on their Hong Kong debut, following tepid secondary listings in the US from Baidu and video site Bilibili.AdvertisementAdvertisement"The wind has turned on all growth stocks," Angelo Meda head of equities at Banor SIM in Milan, said, seeing Deliveroo as a classic example of a stock left vulnerable as investors switch to cheaper 'value' stocks geared to benefit from an economic recovery.

Meda said he stayed out of Deliveroo because of valuation and regulatory concerns and blames mis-pricing for the lukewarm performance of some European IPO stocks."Pricing has often been opportunistic and in most of the cases funds, managers and companies were selling existing shares, meaning that proceeds did not go to fund any expansion plans," he added.

As the vaccination rollout against the global pandemic progresses, investors have turned away from stocks benefiting from social restrictions to hunt out those which might benefit most from the recovery and whose price has been beaten down.Advertisement

A global index of value stocks - a category comprising banks, travel and energy among others - has risen 10 per cent this year relative to growth stocks and scored its best quarter in more than a decade.Some market entrants from traditional businesses, such as used-car platform AUTO1 in Germany and footwear brand Dr Martens in London, have performed well, trading 28 per cent and 21 per cent respectively above their debut prices. headtopics.com

Woman being investigated for not wearing a face mask at Marina Bay Sands 19 new community cases in Singapore, including 8 linked to Changi Airport cluster Lisa Kudrow Opens Up On Filming Friends Reunion Special: “It Was Really Emotional”

COOLING APPETITE?Last year saw high-profile US tech names AirBnB and DoorDash almost double on their first day of trading. As recently as February, UK online retailer Moonpig leapt 25 per cent on its debut."The pipeline is very heavy, which is a sign of dynamism. But because it's very crowded, investors are likely to be more selective," said Eric Arnould, head of equity capital markets (ECM) for Natixis.

Ankit Gheedia, BNP Paribas' head of equity and derivative strategy for Europe reckons the Deliveroo setback won't derail Europe's IPO market because investors are sitting on so much cash and authorities are keen to market their local stock exchanges.

"Overall appetite is there for European regulators to encourage companies to list in Europe," Gheedia said.UK IPO candidates include money transfer start-up Wise and cyber security firm Darktrace, while Dutch tech firm WeTransfer and Swedish payments firm Klarna are poised to issue shares in continental Europe.

The ECM head at another European bank said the Deliveroo fiasco won't stop the market dead in its tracks but could slow the pipeline of future listings and inject some caution after a record IPO year in 2020 when deal value touched US$1.1 trillion. headtopics.com

"Quite a few companies were due to push the button for an IPO post-Easter. Now they will have to wait a while at the very least to see how the overall market behaves," he said. Read more: CNA »

Singapore returns to tighter COVID-19 measures: What's allowed under the new rules?

SINGAPORE: With the recent rise in COVID-19 cases in the community, Singapore has announced tighter measures for about three weeks from Saturday ...

Nope...it just means London stock exchange is pretty useless now for aspiring companies...better play safe and list in the US...😷

Deliveroo shares tumble in London debutShares in Deliveroo opened well below the price of their initial public offering on Wednesday, and fell as much as 30per cent to 275 pence after ...

Deliveroo shares plunge 30% in London debutShares in Deliveroo opened well below the price of their initial public offering on Wednesday, and fell as much as 30per cent to 275 pence after ...

In London, rail-side gardening blossoms during pandemicA busy commuter train station is an unlikely place to find a haven for flowers, bees and hedgehogs.

City of London to create new homes from offices left empty by pandemic LONDON : Offices in London 's City finance district left empty by the pandemic will be transformed into at least 1,500 new homes by the end of the ...

Student expelled from Princeton jailed for 18 years for raping two women in LondonPaulo Kretteis, 22, had punched one of his victims in the face, and told her to smile when she asked if she still had all her teeth left.

YouTuber helps stop attack on Singaporean student in LondonSingapore—An attempt to rob a Singaporean student of his bike was thwarted when a YouTuber, who happened to be live-streaming at that time, stopped the assailant in his tracks. Furthermore,