Source: Business Standard, May 20, 2019
In a market that took a breather after China played hardball on trade and talks on Brexit hit a dead-end, one sector got hot again: food delivery. But Amazon’s decision to take the lead in a $575 million funding round in British startup Deliveroo wasn’t welcomed by all investors.
The news plunged the sector into turmoil, as the three major Europe-listed players — Just Eat, Takeaway.com and Delivery Hero — had the better part of $1 billion of their collective market value wiped out. It doesn’t necessarily spell trouble for those players in the long run, though.
“A bounceback is on the cards — after all, the others aren’t going away, so Just Eat etc., will be looking for investment now, too, in order not to be left behind,” wrote IG Group Chief Market analyst Chris Beauchamp in an email. “The sector has plenty of room for growth, so the race is on to see who can get funding next.”
The hit was still sizable, and those stocks already have a large short base, which is something to keep an eye on. Read the rest of this entry »