Video report by ITV News Business and Economics Editor Joel Hills
As stock-market debuts go, this was a painful one to watch. Deliveroo leapt confidently on stage and ended-up in row A.
The shares were priced at £3.90 but sunk to £2.71 within minutes of the the start of trading. By lunchtime, they’d recovered slightly to £2.85.
The slump in the share price is highly embarrassing for the company - which wants to be seen as a Great British tech success story - and for the government.
ITV News Business Editor Joel Hills says Deliveroo's slump in share prices is humiliating but it isn't a disaster
Deliveroo’s Initial Public Offering (IPO) was supposed to be a showcase for Global Britain post -Brexit, an advert for London as a place for companies to list and raise money. The chancellor, Rishi Sunak, personally endorsed it.
But this isn’t a disaster. Amid the drama, it’s easy to forget that Deliveroo did manage to find buyers for the shares it was selling.
The company has raised £1 billion. Its founder, Will Shu, has made just over £26 million selling some of his shares (he retains a stake of 6.3% and 57.5% of the voting rights).
And around a third of Deliveroo’s 50,000 riders in the UK are in line for a cash bonus of £600 on average.
The company explains this morning’s sell-off by pointing out that market conditions are choppy and indeed they are. But something rather unprecedented has also happened.
In the last week, a series of large UK institutional investors have lined-up to publicly reject the opportunity to buy shares.
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Aviva, Aberdeen Standard, Legal & General, M&G and others have been put-off partly because Deliveroo is restricting the voting rights of shareholders and partly because of the way the company treats its riders.
Their concerns are ethical and commercial.
They believe that Deliveroo will come under increasing pressure from government and from consumers to improve the pay and conditions of riders and that the cost of doing that could mean the business, which is loss-making, will struggle to ever make money.
The sell-off in Deliveroo’s shares makes it an inauguration to forget but the present is not a guide to the future.
Facebook and Uber suffered similar “day one” humiliations, only to shrug them off. The stock market value of both companies has risen as their prospects have improved.
The pressure is now on for Deliveroo to demonstrate it can make money.