[HN Gopher] Deliveroo to offer 50M pounds of stock to customers
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Deliveroo to offer 50M pounds of stock to customers
Author : prostoalex
Score : 26 points
Date : 2021-03-07 17:33 UTC (5 hours ago)
(HTM) web link (www.fidelity.com)
(TXT) w3m dump (www.fidelity.com)
| gogopuppygogo wrote:
| If the delivery as a service model was unprofitable at the height
| of a global pandemic when it was a necessity how does this
| business model ever achieve profitability.
| thom wrote:
| A charitable theory would be that a large amount of their stock
| comes from restaurants, many of which (but obviously not all)
| were closed, as opposed to takeaways, which largely continued
| operating as normal.
| mytailorisrich wrote:
| Actually many restaurants that would have completely closed
| continued to operate only through Deliveroo and others.
| asperous wrote:
| This is based on the narrative that IPOs are systematically
| underpriced and those able to participate walk away with gains as
| a rule. If IPOs are actually accurately priced or overpriced,
| then this doesn't benefit customers in any way.
|
| With that in mind it seems much more likely to me this is just a
| way to push the stock.
|
| Retail trading is booming [1]. I hope this leads to financial
| literacy and more people benefiting from democratic ownership of
| capital (more profits going to worker class).
|
| https://finance.yahoo.com/news/retail-investor-stock-market-...
| bombcar wrote:
| The last few times retail trading was booming didn't work out
| so well for the retailers. The traders did well, however.
| Invictus0 wrote:
| Wow, that's some heavy news!
| barbegal wrote:
| I really hate the idea of using a food delivery app to promote a
| complicated financial product.
|
| Retail investors will only be able to purchase IPO shares through
| the app after making a purchase through deliveroo so maybe they
| are just trying to use this as a small promotional tool for the
| app.
| mattmanser wrote:
| How's this different to brewdog selling shares to its
| customers?
|
| They've been doing that for years, you get a free beer on your
| birthday, etc.
|
| Been successful for them and their customers.
|
| Wouldn't be too surprised if they directly inspired deliveroo
| to do the same, that someone in Deliveroo's UK head office is a
| brewdog shareholder and suggested it off the back of that. They
| seem to be trying to build a similar kind of brand.
| leipert wrote:
| You got me so excited. But then reading through the fine
| print, I realized my excitement is about three months too
| late.
|
| > Therefore, subject to the following paragraph, the Offer
| will be closed in all of the Approved Jurisdictions, except
| for the United Kingdom, on and from 10:59 p.m. (GMT) on 31
| December 2020 ("EU Closing Date").
|
| One needs to reside in US, AU, UK, Ireland or Spain? to be
| able to participate.
| bidirectional wrote:
| What's the complicated financial product? It's just equity.
| lazide wrote:
| Equity is one of the most complicated (and easiest to mislead
| buyers with) financial product out there?
|
| Are the books cooked? Who knows. What are the share classes,
| and how do they relate to each other? Who knows. What are the
| bylaws, and how is board composition determined? Who knows.
|
| All of these are huge. People get misled by far simpler
| products (like loans) all the time, let alone something like
| this.
| ahepp wrote:
| Usually when people talk about "complicated financial
| products" they mean some kind of derivative.
|
| Yes, you can cook the books. That doesn't make the product
| complex.
|
| It is fair to point out that some tech IPOs (We work comes
| to mind) had pretty sketchy corporate structuring and stock
| classes.
|
| But I don't think there's any simpler financial product
| than equity.
|
| You can do the same kind of financial engineering with
| bonds. Do you really know what's in the covenant? Is there
| even a covenant to speak of? People have been getting burnt
| for decades now by companies finding creative ways to
| separate the collateral from the loan.
| nixass wrote:
| Deliveroo is one of prime examples what's wrong with gig economy
| and why it should be heavily regulated. Same as Doordash, they're
| disastrous for local food business'
| easytiger wrote:
| Many of those who use it a month or two a year in one region
| (then go back to another) would disagree.
| mytailorisrich wrote:
| Deliveroo has increased sales of local food businesses. E.g.
| they " _boosted the industry 's revenue by PS460 million in the
| year to June 2017._" [1]
|
| This is not too difficult to believe and to guess the mechanism
| at play: Before Deliveroo (and similar) services many local
| restaurants could only be reached by actually visiting them and
| eating them. Now they can reach people who want to eat at home
| (and who previously could only order from some pizza/kebab
| places that were the only ones to deliver). Therefore, all in
| all, I can believe that they made people order more than before
| and effectively consume more restaurant food than before. For
| my household that has certainly been the case.
|
| [1] https://en.wikipedia.org/wiki/Deliveroo
| objclxt wrote:
| > Before Deliveroo (and similar) services many local
| restaurants could only be reached by actually visiting them
| and eating them.
|
| The counterpoint to this is that one of the more profitable
| parts of Deliveroo's business is to do away with these local
| restaurants entirely in favour of ghost kitchens (which
| Deliver refers to as "Deliveroo Editions").
|
| So Deliveroo enters a marketplace, sees which local
| restaurants are doing a brisk trade, and brings in a ghost
| kitchen that they own and operate (with the higher margins
| that cutting out an additional party entails).
|
| And to the end user - yourself - this can be very hard to
| determine, and you can believe yourself to be supporting a
| local eatery when in fact you're not. In some regards this is
| not dissimilar to Amazon's approach (find out what third
| party products are selling well, release their own version
| and undercut).
| [deleted]
| mytailorisrich wrote:
| That's not how it works.
|
| Ghost kitchens are a good way for restaurant chains to
| expand by opening these types of kitchens for delivery only
| instead of having to open a full-blown restaurant at a
| premium.
|
| For customers it does not matter that their Nando's (just
| an example, I don't know if Nando's do ghost kitchens)
| comes from a Nando's full restaurant or a Nando's ghost
| kitchen. It's exactly the same food and it creates the same
| number of jobs for people working in kitchens...
|
| It's not Deliveroo that can decide that " _Oh, Nando 's do
| a good business here so let's create a fake one by
| ourselves..._".
|
| Now, on the other hand for independent restaurants
| Deliveroo (and other similar services obviously) can be a
| good way to expand their customers base by offering
| delivery without having to invest in the infrastructure.
| prostoalex wrote:
| Ghost kitchens are good at mass-producing generic
| undifferentiated dishes. If you crave "California roll
| sushi" or "some kind of vegetarian pizza", ghost kitchen
| would work, but so would a grocery store takeout section.
|
| Any restaurant that went through the effort of
| distinguishing themselves and specializing in a few
| signature dishes is unlikely to be threatened by ghost
| kitchens.
| dash2 wrote:
| I would think that in my city, most restaurants would have
| struggled to survive through lockdown without Deliveroo and
| similar services.
| mnd999 wrote:
| Or are they peddling their overvalued shares to unsophisticated
| investors?
| bellyfullofbac wrote:
| Smells like it, they probably want to GME themselves.
|
| I remember reading someone's opinion how the current SV
| companies are basically ponzi schemes (e.g. WeWork), the big
| institutional investors hype them up and get the first stocks,
| retail investors would come in next, and the big institutions
| can then cash out. I wish I can remember where I read this...
| llampx wrote:
| I have read this too a long time ago, and it always struck me
| as true. That's why I stopped wanting to invest in new IPOs.
| You're not "getting in on the ground floor" with them,
| they're usually for sale a few months after the IPO. Look at
| SNOW and ABNB for recent examples or GPRO for one from a
| while ago.
| bidirectional wrote:
| No, they are clearly not, and that's a very strong accusation
| to wantonly throw around. It's a 7.5 billion dollar IPO, this
| represents less than one percent of that.
| Gaelan wrote:
| Amusingly, this headline is ambiguous: are they giving their
| customers PS50m worth of shares, or 50M lbs of food (that they
| have in stock)?
| brian-armstrong wrote:
| It's 50M pounds of soup stock. Hope you like tomato bisque.
| ALittleLight wrote:
| I had this same confusion. It's PS's of shares.
| deft wrote:
| This kind of offering is only a very small step above a straight
| up ponzi scheme. We are at the top of the bubble and no one knows
| what to do with their dollars that are rapidly losing value.
| Order your shitty fast food and get a discount on your shitty
| stock.
| Cola wrote:
| What do you mean by "dollars that are rapidly losing value"?
| [deleted]
| danieldisu wrote:
| They are implying that we inflation is rising (even if the
| official numbers doesn't say so) because of the actions of
| the Fed
| ALittleLight wrote:
| Is there an analogous situation in the UK?
| dfgdghdf wrote:
| The UK government must be more careful with inflation
| than the US government because the pound is not a serious
| reserve currency used across the world as the US dollar
| is. That said, the UK government has borrowed
| significantly to pay for coronavirus relief programs.
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