Yahoo Finance Deliveroo pares back losses after record downward slide
Deliveroo shares continued to slide down a slippery slope hitting yet another all-time low of 224p after declining 2.5% on Friday morning.
They have since made up some lost ground, currently down 0.3% to 229p in afternoon trade in London.
Shares in the company have so far failed to find a footing since the company's hotly anticipated initial public offering (IPO) failed to keep investors' attention.
Those close to the float previously claimed short-sellers targeted the IPO.
On Thursday it was revealed that hedge fund Odey took a short position against its share prices.
The bet against the food delivery's share price was taken by James Hanbury and Jamie Grimston, fund managers at Odey — one of London's top hedge funds — the Financial Times reported.
According to the newspaper, the position seems to have been taken on 31 March, the day Deliveroo debuted on the London Stock Exchange.
Short selling is when an investor borrows a stock, sells it and then buys it back at the new price to return it to its owner. Short sellers bet that the stock they sell will drop in price, if it drop, they buy it back at the lower price and return it to the lender.
Shares in the company crashed as much as 30% on the day of its IPO, knocking £2bn off its value.
The company had sold shares at 390p-a-piece in its initial public offering, valuing Deliveroo at around £7.6bn ($10.5bn).
The company has struggled to live up to the hype of its stock market debut in London, with investors claiming bankers overvalued the firm.
Bankers and advisers that worked on the deal blame broader market conditions for the failure.
READ MORE: Deliveroo IPO stock flop raises questions for Goldman and JPMorgan
Many institutions also expressed fears about the company's constant losses and governance structure, which handed founder and chief executive, Will Shu continued control of the business even after it floated.
Several firms including, Aviva (AV.L), L&G (LGEN.L), and M&G (MNG.L) ruled out investing in the business before it floated.
The reopening of the global economy as the vaccine rollout boosts sentiment has seen investors shift from tech stocks towards companies that are poised to do well.
Tech stocks rose during the coronavirus pandemic after billions of workers were forced to work from home and sales in consumer good such as smartphones, laptops and tablets soared.
Companies including Zoom (ZM) reported a robust growth last year after video conferencing calls replaced office meetings. Revenues at the company for 2021 soared 326% year-on-year to $2.6bn (£1.9bn).
READ MORE: Deliveroo IPO flop deals blow to London's tech ambitions
Deliveroo's strong first quarter results did little to boost shares in the company, after warning its outlook remained uncertain as COVID lockdown eases.
It anticipates consumers may order less takeaways as outdoor restaurant areas have reopened.
Growth in the first three months of this year accelerated for the fourth consecutive quarter, with orders rising 114% year-on-year to 71 million and gross transaction value (GTV) increasing 130% to £1.65bn.
Monthly active consumers grew 91% to average 7.1 million during the first quarter.
WATCH: Deliveroo doubles Q1 orders, seeks IPO redemption
