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With Tik Tok and Grubhub invading their home space, Amazon must feel compelled to compete, and they definitely want to be in the last mile delivery space, or they would not have invested in Amazon Restaurants/Deliveroo in the first place. Effectively Amazon has to get the last mile delivery strategy sorted or it could undermine their whole business.
Their initial failure with Amazon Restaurants means that what they clearly saw as a business model that would work, actually failed, which they are not used to. They could have thrown money at it to resolve the issues, but decided their approach and strategy was fundamentally flawed & so withdrew. A very brave decision to close it down and walk away, but the reality is that they have probably withdrawn to regroup & come up with a strategy that will work.
Amazon has had plenty of time to sit back and appraise and evaluate this rapidly developing, fragmented & ultra-competitive market, look at lessons learned etc and the driving imperative must be that they need to commit to entering the market sooner rather than later. Amazon spent $8.45 billion on MGM, so the fall from favour of Deliveroo must make it vulnerable, if it is right for them.
getafgrip
The Amazon investment angle is of interest to me .....Amazon tried and closed Amazon Restaurants (USA), and Daily Dish(USA) , and have Amazon Food (Bangalore,India) .....and they are no doubt learning an awful lot about Deliveroo ..
They tend to do a lot behind the scenes and learn fully about a market...and then.... launch their offer ...
Their involvement here as a strong investor and having Devesh Mishra on board is a very interesting proposition
TikTok starting their trial US food delivery idea with Grubhub, launching in March, will be interesting to follow too
https://techcrunch.com/2021/12/17/tiktok-is-launching-delivery-only-restaurants-across-the-u-s-in-march/
Some very valid points PC worth emphasising that the ground has seismically shifted for now, away from overvalued growth and promises, companies to robust and safer, value companies. It doesn't look like the Tech sector is going to be a completely burst bubble, but valuations on both sides of the Atlantic have been re-appraised significantly downwards.
In November 2021 in the UK RPI was 7.1% and CPI 5.1%, with interest rates starting an incremental rise to combat this i.e companies need to make an additional 5,1% to just stand still! With the high-burn rate of many high-growth companies, investors now want to see a faster route to profitability, and an idea when this will happen. There needs to be strong evidence from results to indicate that Deliveroo's business model works, now that their feast on cheap capital is over.
Just eat still looks cheaper though based on Equity Value / GTV. I make this 0.33 For ROO and 0.286 for JET
yes...there is a good cash holding...
I would imagine the City is wondering what they are going to do with it, in terms of growth and expansion plans ( Devesh Mishra may well have the answer to that question ) ...given the current economic uncertainty and Market move away from growth companies at present and more towards value companies
Devesh Mishra as Chief Product and Technology Officer + 400 high-skilled new tech jobs across a range of skill sets including software engineers, designers, and data scientists...is the tasty recipe that needs to bake a really interesting new development .....
The vast amount of data Deliveroo has is where a lot of value can be extracted ...interesting to see what Devesh comes up with....he has a strong background from Amazon
Cash in itself, is losing spending value in an inflation rising environment
the City will be watching the earnings per share, increased cost pressures, ROI, Gross Profit Margin, and all the other KPI´s , plus competition ....i.e. the company performance with regards to the money being employed within it ..what will exiting Spain cost ? .... how is their International markets fairing where the gross profit % is lower than in the UK ?
this is the markets doing what they do take from weak sellers who panic and then sell when they bring the price back up
Know your stock value top up on the lows like now with all you have a and hold tight till this goes back up to £3
Easy money
ROO has cash and equiv of 1.6billion at the end of H1. So equity is worth 2.2billion.
Am I missing something?
Nothing but a shake down
Market share has been going up not down and they pay there drivers more then most
Top up while you can
Dropping further
Yes expecting melt up around Feb
What the hell is going on with the SP. Will the price go back to 300?????
Going below 200p
yes this will go down. esp with an over inflated mcap of 4bn
Sorry James,
Not used to posting here, I was referring to nuri123a and his helpful and supportive replies ;-) I realised who you were responding to.
Have a great Christmas and New Year.
Wasn’t aimed at you Alan
Happy to advise you on your own portfolio, thanks for the input, very interesting ??
You do know director sells we’re for tax purposes? Lizard
Maybe they will pick up some passing trade in the queues forming for jabs, maybe they wll set up some trade with the local pub groups, hoteliers and restaraunts, with some promotional literature, etc..This could help fill the gaps caused by the cancellations of bookings, etc..
And lookimg at director sells suggests your lovely management have ZERO faith in the future. Best advice - sell before they go to £1 and below. Writing is on the wall - the EU rules have helped to push the share price down 35% in a few weeks.
its not worth 50p. the model is one loss making venture from start to finish. £2 is astonishingly high.
£45 million purchase at 16:35 today, hope this is the start of a recovery. GLA
Got stopped out at 205 this morning. I hadn't reckoned for more director selling on the 15th December.. RNS says they sold another wad at 2.17.. These directors a total disgrace in my opinion. This story is over for me good luck all holders
Hopefully bottom is in now. Been pushed ridiculously low!
Got very close at 202p.