What sank Deliveroo?
In just a few days, Deliveroo’s IPO went from having a book that was oversubscribed at the top of the price range to pricing at the bottom and then collapsing in the aftermarket. What went wrong and does it mean anything for other London listing candidates?
Remember Misys? Those bankers working on Deliveroo’s recent £1.5 billion IPO would certainly have been reminded of it. The £750 million London flotation failed spectacularly back in 2016 when the deal had to be pulled after ending up with an order book that was covered but not at all well.
At least the Misys IPO was cancelled, sparing it the ignominy of a secondary market collapse. Deliveroo, with a book that was reportedly covered many times, pressed on with its March 31 float in the face of worries about its business model, its regulation, its competition, its ethics, its valuation, its shareholder structure, its IPO timing and its failure to yet turn a profit despite its customer base spending most of the past year locked up in their homes.