- Deliveroo CEO Will Shu saw the value of his stake in the firm fall to $US474 ($623) million on its stock market debut.
- His stake was worth $US618 ($812) million at the opening share price, but fell as investors shunned the IPO.
- Shu is also thought to have sold shares worth around $US36 ($47) million when the firm listed.
- See more stories on Insider’s business page.
Deliveroo CEO Will Shu is a wealthy man after the food delivery firm he cofounded floated on the London Stock Exchange on Wednesday.
Shu, the largest individual shareholder at Deliveroo, is thought to have sold around 6.7 million shares when the market opened, at the opening price of £3.90 ($US5.35 ($7)), making $US36 ($47) million from that transaction.
The value of his remaining 6.3% stake is not currently as high as anticipated, after shares in the firm tumbled as much as 30% on its debut.
At the time of writing, the drop has seen Shu’s stake in the firm plummet to a value of $US474 ($623) million in the opening hours of trading, down $US144 ($189) million from $US618 ($812) million at open.
The company’s listing price range for the IPO was between 390 pence ($US5.35 ($7)) and 460 pence ($US6.33 ($8)). At the higher end of the range, Shu’s stake would have been worth as much as $US729 ($958) million.
Shu’s stake will fluctuate throughout the day and its value could end up being higher or lower by market close.
Deliveroo’s IPO gave it an opening valuation of about $US10.5 ($14) billion but it shed more than $US2.7 ($4) billion in market value in its first hours as a public firm under the ticker “ROO.”
The company, founded in 2013 by Shu and his friend Greg Orlowski, has faced criticism from large investors and activists in the run-up to its IPO over its business model.
Deliveroo’s app allows consumers to order grocery and food on demand, and the firm relies on a network of gig-economy riders to ferry the goods out.
At least six investment firms, including Aviva Investors, Rathbones, Legal & General, and Standard Life Aberdeen, announced they wouldn’t invest in Deliveroo. Some cited both its lack of full-year profitability, and the threat posed to future profitability by its ongoing reliance on gig-economy riders.
“Deliveroo has gone from hero to zero as the much-hyped stock market debut falls flat on its face,” said AJ Bell investment director Russ Mould on Wednesday. “It had better get used to the nickname ‘Flopperoo’.”