(Reuters) – Deliveroo shares rallied Wednesday, with retail investors able to trade shares purchased in an initial public offering (IPO) of a food delivery group on the first day, while some of its members traveled around London demanding fair pay.
At 14.11 GMT on the first day of unrestricted trading, Deliveroo shares were up 2.1% to 286p, but still about 25% below the IPO price after falling sharply on the first day it debuted on the London stock market last week.
Deliveroo’s initial valuation was £ 7.6bn ($ 10.46bn) at 390p a share.
“Although Deliveroo is up … on the first day of trading available to retail investors, it is still too early to tell if this is a vote of confidence in the stock,” said Connor Campbell, an analyst at Spreadex.
“The coming months will be a real challenge for the company.”
About 100 cyclists and moped drivers traveled from Shoreditch in East London to Deliveru’s City headquarters on Wednesday asking for fair pay and basic workers ‘rights during a demonstration organized by the Independent Workers’ Union of Great Britain (IWGB).
“Sometimes I can get a comfortable living wage in one shift. And then on the next shift I can go out and work for hours and literally make nothing, ”Kerry Hargadon, 25, who has driven the Deliveroo for six years, told Reuters.
“5 POUNDS PER HOUR”
Musician Jason Bond, 32, who joined Deliveroo after work dried up at the onset of the pandemic, said that while some shifts brought in decent wages, others left him with below minimum wages.
“You can make £ 5 an hour,” he said.
A Deliveroo spokesman said that in a poll conducted on Tuesday, 88% of riders said they were happy with the company.
“This small self-proclaimed union (IWGB) does not represent the vast majority of riders who tell us they value the total flexibility they enjoy with Deliveroo and the ability to earn over £ 13 an hour,” the spokesman said in a statement.
The bad debut on the London stock market, which saw Deliveroo’s valuation lost around £ 2bn, came after major investors like Aberdeen Standard Life and Aviva canceled the deal, citing concerns over operating conditions in the gig economy. and excessive voting rights will be transferred to founder Will Shue.
Antonio De Negri, founder and CEO of London-based financial boutique Cirdan Capital, said the company needs to recover its lost value.
“One solution could be, for example, offering a portion of the shares with a large number of voting rights to those institutional investors who are interested in the business model of the British platform,” he said.
“A SMILE ON PAIN”
However, for some investors, the gig economy model remains shaky at best, with workers seen as independent contractors with limited legal rights and benefits.
In March, Uber Technologies announced after a defeat in court that it would offer guaranteed rights to its more than 70,000 UK drivers, including vacation pay, a retirement plan and a limited minimum wage.
Deliveroo said in its IPO prospectus that it is involved in litigation in a number of countries as it faces issues related to the status of its drivers.
Small retail investors who bought shares through a “public” share offer allowing Deliveroo clients to participate in the listing suffered losses on the first day as London Stock Exchange rules did not allow them to trade until today.
“I smile through the pain and I’m going to hold on. I’ll bring it to zero if need be, ”said Sam Elliot, a £ 250 London primatologist.
Chart: Deliveroo shares rally as retail investors join.
Reporting by Julien Pontus, Abhinav Ramnarayan, Paul Sandle, Elizabeth Howcraft and Danilo Masoni; Ritvik Carvalho’s schedule; Edited by Kirsten Donovan