Amazon-backed Deliveroo back in black after 30% plunge on debut
Deliveroo (ROO.L) shares have sprung back up to their debut price for the first time since their London listing in April, when shares were offered to investors at 390p.
Deliveroo suffered a disastrous public market debut earlier this year, with shares slumping 30% on the first day of trade.
The stock briefly hit 391p on Tuesday morning as it ticked up around 0.3% in early trade.
Deliveroo's poor float was blamed on bad timing, concerns about regulation of the gig economy, and investors' concerns about founder Will Shu's decision to opt for a dual class listing structure, which gave him continued complete control of the business after listing.
Earlier this month, shares had rallied after rival Delivery Hero (DHER.DE) disclosed a 5% stake in the business.
Delivery Hero runs takeaway delivery businesses across Europe, Asia, Latin America, and the Middle East. It formerly operated the Hungry House brand in the UK before selling the franchise to local operator Just Eat Takeaway.com (JET.L) in 2017.
Read more: Just Eat's shares gain on booming orders and £2.2bn first half revenue
A stock market filing showed Berlin-based Delivery Hero had bought a 5% stake in Deliveroo. The news sent Deliveroo's stock price up 8% to 350p.
Other news that buoyed the price included a UK court ruling in June that Deliveroo's riders are self-employed.
In July the Amazon-backed company had raised its guidance for transaction growth for the year, later reporting strong first-half results, spurring confidence the food delivery market could keep momentum even as economies emerge from lockdowns.
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