Amazon-backed food delivery start-up Deliveroo plunged about 30% on its stock market debut on Wednesday. According to CNBC, the slump reflects pressure from top investors and trade unions over workers’ rights.
Deliveroo priced its shares at 3.90 pounds or $5.36 on Tuesday, the bottom end of its IPO target range, expecting a market value of 7.59 billion pounds.
The startup is selling 384,615,384 shares, equating to an offer size of about 1.5 billion pounds, of which 1 billion pounds go to the company and 500 pounds to the existing shareholders.
The company’s shares prices fell to around 2.73 pounds on debut, wiping out approximately 2 billion pounds from its valuation.
Deliveroo can still cancel the IPO and avoid any trades made until unconditional trading starts on April 7.
The company faces concerns of its treatment of drivers, company’s governance, and valuation, with some riders going on strike next Wednesday.
Deliveroo’s IPO is expected to test London’s tolerance for high-growth tech companies that spend heavily on growing at scale before prioritizing profits.
Deliveroo’s IPO offer is the largest in the U.K since e-commerce firm The Hut Group raised 1.88 billion pounds in a listing last September.
