Just Eat Takeaway fell more than -18% to an all-time low last Thursday. This was mainly due to an interview with the CEO of Grubhub in the Wall Street Journal. Alphastocks want to tell you more about the Just Eat Takeaway headache file.
For the unique reader who is not familiar with the platform: you can order food here to have it delivered at home and the participating restaurants pay a commission for this. Just Eat Takeaway.com NV (formerly Takeaway.com) describes itself as one of the largest and most important online food marketplaces in Europe (and emerging in the United States). This marketplace connects consumers and restaurants in nine European countries. According to its own information, the company has market leading positions in each of its core markets; Netherlands, Germany, Belgium, Austria and Poland.
Just Eat Takeaway & Grubhub
At a paid Food Delivery Forum hosted by the WSJ, Grubhub CEO Adam DeWitt was interviewed. In the interview, DeWitt literally says:
‘Jitse has been very vocal about it, my preference is to have a strong partner and continue to have ownership in Grubhub.’
Because there was already considerable ‘selling pressure’ from large shareholders and private investors, this is probably the last straw. It seems that a number of major shareholders are completely done with it and are dumping their positions en masse. Meanwhile, the market cap has fallen to $3 billion, as much as the stake in iFood was previously thought to be worth.
And now?
The food delivery market is still developing. The dominant players differ per country, but because the entire market is growing, there is room for different players. The competitive advantage is mainly achieved by being the largest player in a market. As Jitse Groen always indicates, it is in this industry “Winner takes all” and this doesn’t seem to work in the US.
The acquisition of the American Grubhub, with which Just Eat Takeaway.com entered the US market, appears to have been a failure. At the time, JET bought Grubhub for $7 billion, but has not yet made a cent from the purchase. In fact, it’s a big drama. Shareholders even want Grubhub to be sold as soon as possible, albeit at a huge loss.
What now? Hard to tell. Communication between Jitse Groen and the shareholders has been difficult for months and this does not appear to be changing. If you are a shareholder, you would do well to examine your investment more closely and see whether your thesis is the same as when you bought the share.
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