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   Technology StocksPeer-to-Peer, Gig and On-Demand Economies

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To: Glenn Petersen who wrote (829)3/2/2021 5:18:21 PM
From: rogermci®
1 Recommendation   of 845
LYFT just raised Q1 EBITDA forecast. The company attributes the improvement in its Adjusted EBITDA outlook to reduced operating expenses. Reduced operating expenses rule the day for ride share operators. UBER trading 56 AH.

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From: Glenn Petersen3/5/2021 7:40:10 AM
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Exclusive: Instacart mulls direct listing in snub to IPOs - sources

By Joshua Franklin, Anirban Sen, Krystal Hu
March 5, 2021

(Reuters) - U.S. grocery delivery app Instacart is considering going public through a direct listing, concerned that it could leave money on the table through a traditional initial public offering (IPO), according to people familiar with the matter.

The move would make Instacart the latest company to snub an IPO, for decades the primary path to a stock market debut, because it risks pricing its offering too low compared to where its shares end up trading. In a direct listing, companies go public without raising money through a stock sale.

Shares of newly listed U.S. companies that went public through an IPO ended trading up 36.2% on average on their first day last year, compared to 17.2% in 2019, according to data firm Dealogic.

Investment bankers say they often struggle to price in the impact of huge investor demand for popular consumer names, such as home-sharing start-up Airbnb Inc and food delivery app DoorDash Inc, given the limited initial stock float of these companies. Some venture capital investors, such as Benchmark general partner Bill Gurley, say bankers keep IPO prices low to favor their Wall Street clients.

Instacart has no short-term need for cash after raising $265 million in a private fundraising round earlier this week. The company’s business has benefited from more consumers shopping groceries online more to cook at home during the COVID-19 pandemic.

Investment bankers working on Instacart’s listing have estimated that it could be valued by the stock market at more than $50 billion, two of the sources said. Instacart said earlier this week its latest fundraising round valued it at $39 billion.

The San Francisco-based company has yet to make a final decision on how it will go public, the sources cautioned, requesting anonymity as the discussions are confidential.

Instacart declined to comment.

IPOs have been on a tear since last summer as markets rallied following the Federal Reserve’s moves to support the U.S. economy during the COVID-19 pandemic. Yet their popularity has been eroding as more companies choose to go public through mergers with special purpose acquisition companies (SPACs) or direct listings.

There were 208 IPOs excluding SPACs last year, the most since 2015, according to Dealogic. By comparison, 249 SPACs went public through IPOs. Two prominent direct listings last year were those of technology firms Palantir Technologies Inc and Asana Inc.


Only a handful of companies have gone public through a direct listing since it was pioneered in 2018 by music streaming platform Spotify Technology SA.

U.S. gaming platform Roblox Corp abandoned plans for an IPO earlier this year because it did not want to leave money on the table. It is slated to debut on the New York Stock Exchange (NYSE) next week through a direct listing.

U.S. cryptocurrency exchange Coinbase Global Inc has said it is looking to go public through a direct listing. Online broker Robinhood and robotic software startup UiPath Inc also considering choosing a direct listing over an IPO, according to people familiar with the matter.

Robinhood and UiPath declined to comment.

Once a company goes public through a direct listing, insiders can typically sell their shares immediately rather than be restricted for months, as is the case with IPOs.

A company can also sell its shares in the open market to raise capital following a direct listing without restrictions, typically after it has reported quarterly earnings. Some companies opting for direct listings also choose to raise money before they go public through private fundraising rounds.

The NYSE now offers companies the option to raise money in a direct listing after the U.S. Securities and Exchange Commission approved it in December.

Under the NYSE’s new model, new shares being sold in the newly listed company have to trade within a pre-set range for money to be raised, or the listing has to be postponed. No company has taken up this option so far, though dozens have contacted the NYSE to express interest in it and several are actively pursuing it, according to a person familiar with the matter.

The NYSE declined to comment.

Reporting by Joshua Franklin in Boston, Anirban Sen in Bangalore and Krystal Hu in New York; Editing by Greg Roumeliotis and Grant McCool

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From: TimF3/8/2021 3:18:36 PM
1 Recommendation   of 845
How dare they not want to be rescued
Natalie Solent (Essex)

Two days ago the BBC reported that the Supreme Court had ruled that Uber drivers are workers rather than being self-employed.

With what glad hosannas did the drivers greet the news of their liberation!

Er, no. As Sam Dumitriu writes in CapX,
Putting questions of legality to one side, it’s clear Uber’s business model works for drivers. If you don’t believe me, just ask them. Countless surveys have found that the majority of Uber drivers are happy with the status quo and would not sacrifice flexibility for greater security.

A survey carried out by Oxford University academics Carl Benedikt Frey and Thor Berger, in partnership with Uber, found that drivers reported higher levels of life satisfaction compared to other London workers, despite on average earning less. And, counter to the conventional wisdom, drivers typically worked full-time in other jobs before choosing to shift to Uber. Furthermore, more than four-fifths of drivers agreed with the statement: ‘Being able to choose my own hours is more important than having holiday pay and a guaranteed minimum wage’. They found that drivers would accept a move to fixed hours – but only if it came with a 25% pay rise.
Perhaps they had looked across the Atlantic and seen the results of California’s attempt to save gig economy workers from working in the gig economy:
In Uber’s home state of California, 70% of drivers backed Proposition 22, a ballot measure that created a carve-out for ridesharing services from the state’s tough laws on freelance work. The measure passed with 59% of the vote in November.

AB 5, the freelancer law which Prop 22 was responding to highlights how interventions designed to solve a problem in one market can have unintended consequences in others.

When it passed, Vox published an article: “Gig workers’ win in California is a victory for workers everywhere”. A month later they published another article: “Freelance journalists are mad about a new California law. Here’s what’s missing from the debate. The alternative to AB5 would be worse”. Two months later, Vox Media itself cut hundreds of freelance writing jobs in California.

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From: Glenn Petersen3/15/2021 6:47:08 AM
   of 845
Amazon-backed Deliveroo aims to raise $1.4 billion in upcoming IPO

Sam Shead @SAM_L_SHEAD


-- Alongside Amazon, Deliveroo is also backed by investors including Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.

-- Deliveroo was valued at $7 billion in July when it raised an additional $180 million from investors.

-- Reports have suggested that it could be valued at around $10 billion following the IPO.

LONDON - Food delivery service Deliveroo is seeking to raise £1 billion ($1.4 billion) by selling new shares in its upcoming initial public offering on the London Stock Exchange.

The company announced Monday that some of its existing shareholders will also sell some of their shares.

Alongside Amazon, Deliveroo is also backed by investors including Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.

Deliveroo is also planning to offer £50 million of stock to its customers.

Some early Deliveroo backers stand to make a 60,000% return on their investment, according to a report from tech media website Sifted on Monday.

Deliveroo was valued at $7 billion in July when it raised an additional $180 million from investors. Reports have suggested that it could be valued at around $10 billion following the IPO.

Goldman Sachs and JP Morgan Cazenove have been appointed as the joint global coordinators for the IPO. A date the initial public offering has not been officially announced but is likely to be in the next few weeks.

A filing last week included details on Deliveroo’s dual-class share structure, which will see Deliveroo CEO Will Shu get 20 votes per share, while all other shareholders will only be entitled to one vote per share.

Last week, the company also revealed that it made a loss of £223.7 million in 2020. The losses are substantially less in 2020 than they were in 2019, however, when the London-headquartered firm recorded a loss of £317 million.

While the eight-year-old company is still in the red, its revenues climbed to £4.1 billion in 2020, up from £2.5 billion in 2019.

Deliveroo’s turnaround

Deliveroo went from near failure in 2020 amid a competition review into Amazon’s minority investment, to turning an operating profit toward the end of the year thanks to the coronavirus lockdown-driven surge in demand for online takeout services.

Today Deliveroo claims to have over 115,000 food merchants, 100,000 restaurants and millions of consumers across 12 countries. The filing shows that six million orders are made on Deliveroo every month.

Amazon backed Deliveroo in May 2019, leading a $575 million funding round in exchange for a 16% stake in the business.

In July 2019, the U.K.’s antitrust regulator, the Competition and Markets Authority, argued that Deliveroo’s cash injection from Amazon could reduce competition by removing the possibility of the e-commerce giant re-entering the market, while Deliveroo could “cease to be distinct.” It froze the investment for almost a year while it investigated.

To the disappointment of rivals Just Eat and Domino’s Pizza, the deal was approved by the CMA in August after Deliveroo said it could go out of business without the capital.

As interest in the food delivery market continues to grow, UBS analysts have named seven stocks in the sector that are set to pop by up to 30%.

People ordering takeout more frequently — and spending more when they do — means the sector could reach a value of almost $400 billion by 2024, the bank said. A Euromonitor estimate, meanwhile, said it could be worth $1 trillion in the next decade.

— Additional reporting by CNBC’s Ryan Browne.

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To: rogermci® who wrote (833)3/15/2021 10:37:47 AM
From: Rarebird
   of 845
If I am right and UBER is about to take off in its strongest wave, $85 will be the minimum and $95 is more likely before the next consolidation/corrective phase.

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To: Rarebird who wrote (837)3/15/2021 11:14:22 AM
From: rogermci®
   of 845
That would be sweet. Thanks. A lot of chart set ups look good and you have a knack for picking up on that.

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From: Glenn Petersen3/31/2021 7:05:20 AM
   of 845
Amazon-backed Deliveroo tanks in London market debut

Sam Shead @SAM_L_SHEAD
Ryan Browne @RYAN_BROWNE_


-- Deliveroo’s shares began trading under the ticker “ROO” at 8 a.m. London time on Wednesday.

-- Deliveroo is selling 384,615,384 shares in the IPO, equating to an offer size of approximately £1.5 billion.

-- The IPO has been hit by concerns over Deliveroo’s treatment of its drivers, the company’s governance and valuation.

LONDON — Shares of British food delivery start-up Deliveroo plunged in its stock market debut Wednesday, as the company faces pressure from top investors and trade unions over workers’ rights.

Deliveroo, which is backed by Amazon, saw its shares sink around 30% in early deals compared to the issue price, before trimming some losses.

The company priced its shares at £3.90 ($5.36) Tuesday, giving it an expected market value of £7.59 billion, which was at the bottom end of its IPO target range.

But the company’s share price was down to around £2.73, according to Reuters data, as shares began conditional trading Wednesday morning on the London Stock Exchange. This wiped approximately £2 billion off the company’s valuation. The company can reportedly still cancel the IPO and void any trades made until unconditional trading starts on April 7.

Deliveroo is selling 384,615,384 shares, equating to an offer size of approximately £1.5 billion. Of that, £1 billion will go to the company itself and £500 million will go to existing shareholders, with Amazon and Will Shu, the company’s CEO and co-founder, among those set to gain the most.

The company’s shares began trading under the ticker “ROO” at 8 a.m. London time on Wednesday. JPMorgan and Goldman Sachs led the listing, while Bank of America Merrill Lynch, Citi, Jefferies and Numis were also part of the syndicate. Retail investors won’t be able to trade Deliveroo shares until conditional dealings end on April 7.

Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, said that Deliveroo’s price “isn’t quite as tasty as it was hoping for.”

“This isn’t hugely surprising given the substantial background noise surrounding the company,” she said.

“The biggest concern is regulation around worker rights. The flexible employee model of Deliveroo’s riders is a huge pillar of the group’s plans for success.”

Deliveroo’s IPO offer is the largest in the U.K. since e-commerce firm The Hut Group raised £1.88 billion in a listing last September. In terms of market cap, it is the biggest IPO to take place in London since Glencore went public nearly a decade ago. It’s also Britain’s largest-ever tech listing by value, surpassing that of The Hut Group and Worldpay which debuted in 2015 before delisting.

‘Next phase of our journey’
“I am very proud that Deliveroo is going public in London — our home,” said Shu in a statement. “As we reach this milestone I want to thank everyone who has helped to build Deliveroo into the company it is today — in particular our restaurants and grocers, riders and customers.”

He added: “In this next phase of our journey as a public company we will continue to invest in the innovations that help restaurants and grocers to grow their businesses, to bring customers more choice than ever before, and to provide riders with more work. Our aim is to build the definitive online food company and we’re very excited about the future ahead.”

It’s a major vote of confidence in London, as the U.K. capital looks to attract high-growth tech companies and boost its financial clout after Brexit. British Finance Minister Rishi Sunak described Deliveroo as a “true British tech success story” when the company announced plans to list in London.

However, the IPO has been hit by concerns over Deliveroo’s treatment of its drivers, the company’s governance and valuation. Legal and General, Aberdeen Standard, Aviva and M&A — which collectively have about £2.5 trillion in assets under management — have all shunned Deliveroo’s debut.

Each of the investment firms cited concerns about the gig economy in which Deliveroo operates. The company’s turquoise-uniformed couriers have become ubiquitous in London and other cities during the coronavirus pandemic, as people turned to food delivery apps for their groceries.

Some of Deliveroo’s riders are going on strike next Wednesday once its IPO opens up to retail traders, to protest what they see as poor working conditions and low pay. For its part, Deliveroo says its drivers are given flexibility to work when they want and earn £13 an hour on average during the busiest times.

That hasn’t cooled investor worries over Deliveroo’s business model, however. Earlier this month, Uber reclassified all its U.K. drivers as workers entitled to a minimum wage and other benefits after the country’s top court ruled a group of drivers should be treated as workers.

This is expected to result in higher costs for Uber — potentially to the tune of $500 million, according to Bank of America. Investors are worried that Deliveroo may suffer the same fate, and the company has set aside £112 million to cover potential legal costs relating to the employment status of its riders.

Meanwhile, institutional shareholders have also raised concerns with Deliveroo’s governance. The company is listing in London with a dual-class share structure, which gives Shu over 50% of the voting rights.

Test for London
Deliveroo’s IPO will be a test of London’s tolerance for high-growth tech companies that spend heavily on growing at scale before prioritizing profits.

It’s a mantra that gained popularity in Silicon Valley with Amazon, which had initially been unprofitable for a number of years. Deliveroo remains heavily lossmaking, having reported a loss of £223.7 million million in 2020.

“Deliveroo is yet to turn a profit, which makes it very difficult to value on a traditional basis,” said Lund-Yates.

“But a market cap of £7.6 billion means the company’s worth 6.4 times last year’s revenue, which is some way above rival Just Eat’s 4.8 times, despite the lower price. That means there’s pressure for Deliveroo to deliver the goods, or its share price will be in the firing line.”

The company has managed to enter the black in recent months thanks to a rise in demand for food delivery.

But U.K. investors are worried by Deliveroo’s lofty £7.6 billion valuation, especially at a time when vaccines are being rolled out and countries are plotting a reopening of their economies. DoorDash, a U.S. rival to Deliveroo that went public last year, has a significantly higher market cap of around $42 billion.

Deliveroo warned it could have failed early last year as an investment from Amazon, its largest outside shareholder, was put on hold amid a competition review. Amazon’s stake in Deliveroo was later approved by regulators.

“A lack of blockbuster listings in London and pent-up investor demand during the pandemic have created encouraging market dynamics for Deliveroo,” said Nalin Patel, EMEA private capital analyst at PitchBook.

“However, near term volatility facing public equities and questions surrounding workers’ rights have impacted IPO pricing and investor participation,” Patel added.

Nevertheless, several tech firms are flocking to London to list their shares, with the likes of Trustpilot and Moonpig having both done so recently. A number of other firms, including Wise and Darktrace, are expected to debut later this year.

Martin Mignot, a partner at Index Ventures, one of Deliveroo’s earliest backers, said London has the opportunity to become the “go-to” for European tech listings.

“Deliveroo is a big win for the capital, but much more has to be done,” he said. “Compared to U.S. listings, European founders still face more traditional public market investors who are not accustomed to backing high growth tech companies.”

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To: Rarebird who wrote (837)4/1/2021 3:09:29 PM
From: rogermci®
   of 845
Uber shares +5% after both Jefferies and Wolfe Research initiated with Buy/Outperform ratings earlier (57.11 +2.60)

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To: Glenn Petersen who wrote (839)4/3/2021 6:10:56 AM
From: Glenn Petersen
   of 845
Ghost Kitchens Will Keep Appearing on Your Delivery App, Even as the Pandemic Eases

Food-delivery platform Deliveroo is doubling down on renting delivery-only kitchen space to restaurateurs. U.S. delivery platforms could follow suit.

By Laura Forman
Wall Street Journal
April 2, 2021 5:30 am ET

Americans can’t wait to get back inside their favorite restaurants but, after the initial rush, it is likely that the pandemic changed dining habits permanently. One in six U.S. restaurants has been forced to close since the start of the pandemic, the National Restaurant Association said in December. Consumers’ embrace of food delivery could relegate even more dining-out experiences to consumers’ own dining rooms.

After overindulging in DoorDash’s U.S. public offering in December, investors ghosted the London initial public offering of UK-based food delivery company Deliveroo this week, possibly signaling indigestion with the sector—its shares fell by 26% in their debut. But it has a special ingredient that might warrant a second bite, or at least imitation by competitors. The Amazon-backed company is doubling down on the concept of commissary cooking facilities where everyone cooks but no one eats.

These so-called “ ghost kitchens” allow for the creation of restaurants that mostly exist, in effect, only on delivery apps or as takeout venues. They can help restaurants to expand their reach on a budget and help new restaurateurs who want to start servicing customers but aren’t sure where to lay down roots—or aren’t ready to sign an expensive long-term lease for a bricks-and-mortar location.

And while they could mean fewer opportunities for consumers to dine out, they also enable eaters to get their food faster.

Deliveroo, which began renting delivery-only kitchen space to restaurateurs back in 2016, now says it is the global leader in the business with close to 250 kitchens across eight markets world-wide. In January, the company announced plans to more than double the number of locations where it offers kitchens this year. The pandemic has no doubt made this concept all the more attractive to struggling restaurants as rents in desirable expansion areas like affluent suburbs have skyrocketed and usage of delivery services has grown rapidly.

DoorDash has only a single ghost kitchen in Silicon Valley, dubbed “a WeWork for restaurant kitchens” by TechCrunch. Uber Eats says it hasn’t invested in any ghost kitchens domestically, though it briefly tried a concept in Paris, before abandoning it last year, citing cost cuts.

U.S. food delivery companies might be spooked by the idea of such vertical integration, but some of their former executives clearly aren’t. Uber co-founder Travis Kalanick has been investing in the business through his startup CloudKitchens for several years now. A recent Wall Street Journal report found entities tied to Mr. Kalanick’s company have already spent more than $130 million acquiring properties like closed restaurants, auto-body shops and warehouses. Mr. Kalanick’s company was valued at over $5 billion following a $700 million capital raise back in 2019, according to PitchBook, proving commissary kitchens have significant potential in and of themselves.

Similar concepts are just getting started. Last year, former DoorDash software engineer Jon Goldsmith launched ghost kitchen startup Local Kitchens, which will soon have three locations in the Bay Area. Mr. Goldsmith’s company raised a seed round last fall that counted DoorDash chief executive officer Tony Xu, Twitter CEO Jack Dorsey and Yum Brands’ co-founder and former CEO David Novak as investors. Local Kitchens will join older U.S. startups in the space like REEF Technology and Kitchen United, backed by big names like SoftBank and Google Ventures, respectively.
The profitability of the business model is still something of an open question. Deliveroo said its business grew overall revenue 54% year on year in 2020 and still lost money on the basis of adjusted earnings before interest, tax, depreciation and amortization. That compares to DoorDash, which grew revenue 226% last year and generated profits on that basis.

Deliveroo wouldn’t comment specifically on the economics of its ghost kitchens, but its IPO filing notes it can charge higher commissions to restaurants using its kitchens by offering them a turnkey real estate service. That could prove especially attractive to U.S. food delivery companies. They have endured widespread temporary commission caps across U.S. cities amid the pandemic and are now facing the threat of permanent caps in some of their largest markets.

While Local Kitchens works with delivery providers like DoorDash, Mr. Goldsmith says his kitchens are unique in also offering a retail storefront where guests can order on kiosks and pick up their own food, lowering costs for diners and improving its own bottom line.

Ghost kitchens appear to offer benefits to all sides of a delivery platform’s marketplace. For one, they can more easily enable a land grab in untapped markets. They might also augment a platform’s restaurant selection. In addition to lower rent, ghost kitchens provide shared staff, facilities and supply purchasing—attractive features for a restaurant or chain of any size. Delivery drivers like them, too, according to Deliveroo, because they create a one-stop shop to fulfill multiple orders at once with shorter wait times—critical as unfair driver compensation has been a hot-button topic across the globe.

U.S. consumers may want to think twice about dusting off their dinner jackets after a year of collecting mothballs. The future of dining could look a lot like the past year.

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From: Glenn Petersen4/29/2021 3:40:44 PM
   of 845
Uber, Lyft, DoorDash stocks fall sharply after U.S. Labor secretary says gig workers should be classified as employees

Jessica Bursztynsky @JBURSZ


-- Shares of Lyft, Uber and DoorDash dipped Thursday after Secretary of Labor Marty Walsh told Reuters in an interview that gig workers should be classified as company employees.

-- Lyft stock traded down 9.5%, while Uber shed about nearly 7%. DoorDash was down 9%.

-- “We are looking at it but in a lot of cases gig workers should be classified as employees ... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters.

Shares of Lyft, Uber and DoorDash dropped sharply Thursday after Secretary of Labor Marty Walsh told Reuters in an interview that gig workers should be classified as company employees.

Uber shares lost more than 6%, while both Lyft and DoorDash dropped more than 10% in midday trading.

“We are looking at it but in a lot of cases gig workers should be classified as employees ... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters. He said the department will be reaching out to companies that employ gig workers to make sure the workers have access to consistent wages, sick time and health care.

“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America,” he added, “but we also want to make sure that success trickles down to the worker,” he added.

Walsh’s views could set the tone for how the administration plans to tackle the gig economy. Stark policy changes could upend the core business models of ride-hailing and food delivery apps, making it harder for them to reach profitability.

Uber and Lyft have maintained optimism they will become profitable by the end of this year on an adjusted EBITDA basis. In its most recent quarter, Uber lost $968 million on a GAAP basis. Lyft reported a net GAAP loss of $458 million for its last quarter, while DoorDash reported a net GAAP loss of $312 million for its fourth quarter of 2020.

Classifying drivers as contractors allows the companies to avoid the costly benefits associated with employment, such as unemployment insurance.

The companies are already facing a patchwork of state and national regulations on the matter. Last year, Uber and Lyft successfully funded a voter proposition in California that overturned that state’s law classifying gig workers as full-time employees but lost a similar battle in the U.K.

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