Food-delivery startup Deliveroo’s London Stock Exchange debut is off to a bad start, with shares falling by almost a third in the early hours of trading on the back of the company being pressured by top investors and trade unions over workers’ rights.
The London-based tech unicorn had priced the 384,615,384 shares on offer at £3.90 at the opening bell. However, the share price dropped to £2.73 within the first hour of trading. This meant that roughly £1.5bn of its value had fallen to the wayside.
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The news comes as Deliveroo is facing increased pressure from trade unions, employees and investors to overhaul its gig economy-based model. Instead of categorising couriers as self-employed contractors, more market stakeholders are encouraging the startup to categorise its riders as workers with all the benefits that would entail.
Last week, several top investors said they’d refrain from investing in the initial public offering (IPO) because of the gig economy model.
Following this news, Deliveroo said it would aim to achieve a market cap at £7.6bn and £7.85bn via the IPO, down from its initial £8.8bn valuation target.
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By GlobalData
