Deliveroo Share Price Rises: Retail Investors Like the Stock, Employees Demanding Fair Wages
Deliveroo stocks rose on Wednesday, the first day after the initial public offering (IPO), retail investors had the opportunity to invest in the company’s shares. On the same day, Deliveroo drivers were protesting, asking for fair living wages for their work.
Deliveroo had an unsuccessful first day on the stock market. The IPO price dropped by 25% from the initial evaluation of $10.46 billion and $5.39 per share. However, the next day shares went up 2.1% to $3.95 as retail traders entering the market.
Spreadex analyst Connor Campbell said: “Though Deliveroo has risen… on the first day of trading available to retail investors, it’s too soon to tell whether this is a vote of confidence in the stock. The real test for the company is going to be the coming months.”
The unsuccessful stock market debut was followed up by protests, with thousands of Deliveroo riders gathering in London. According to the Independent Workers’ Union of Great Britain (IWGB), the food delivery service is “the world’s most protested app-based platform.”
Almost a dozen major investment funds have decided not to invest in Deliveroo because of concerns over the company’s treatment of workers.
A spokesperson for the company said: “This small self-appointed union does not represent the vast majority of riders who tell us they value the total flexibility they enjoy while working with Deliveroo alongside the ability to earn over £13 an hour.” Deliveroo claims, according to an internal survey, that 88% of riders are happy with the company.
The poor stock performance is also attributed to big-time investors like Aviva and Aberdeen Standard Life deciding to pass on the opportunity to invest in Deliveroo. The investors cited concerns about the gig economy working conditions and disproportional board voting rights that would favor the company’s founder, Will Shu.
“One solution could be, for example, to offer part of the shares with more voting rights to those institutional investors interested in the business model of the British platform,” said the CEO of Cirdan Capital, Antonio De Negri.
Investors are still wary of how companies in the gig economy structure themselves, as workers are considered independent contractors without the benefits and legal protections employees will have.