MARKET REPORT: EU gig economy battle hits Deliveroo and Just
MARKET REPORT: Investors lose appetite for Deliveroo and Just Eat amid fears of EU crackdown on gig economy
Shares in takeaway companies Deliveroo and Just Eat fell on fears of a crackdown on Europe’s gig economy.
Deliveroo fell to a record low of 220p before closing 3.1 percent, or 7.5p, to 234p, while Just Eat fell 4.9 percent or 214p to 4146.5p.
The sell-off came amid speculation that the European Commission (EC) will propose stricter rules requiring companies to hire drivers and drivers directly.
Deliveroo fell to a record low of 220p before closing 3.1p% or 7.5p to 234p, while Just Eat fell 4.9% or 214p to 4146.5p
Many takeout companies classify delivery drivers as independent contractors rather than employees, meaning they are not required to provide certain benefits such as paid sick leave and occupational pensions.
However, if the EC orders that these employees be classified as full-time employees, it could jeopardize the company’s business models by sharply increasing costs and potentially leading to higher prices for customers.
The employment status of delivery drivers has been a thorny issue for some time now, with hundreds of Deliveroo drivers going on strike in several UK cities earlier this year to protest pay and working conditions.
The latest share price drop also means the company’s shares are now about 43 percent lower than the price of 390 pence when it made its market debut in April.
Inventory Monitoring – Okyo Pharma
Okyo Pharma’s shares hit a nine-month high as it plans to accelerate clinical trials of its dry eye treatment.
Boss Gary Jacob said that since his OK-101 drug is administered directly into the eyes, it is expected to skip a Phase I trial needed for drugs taken orally.
As a result, treatment moves directly into phase II trials in humans.
The study will include between 100 and 200 patients and will last six to eight months with a planned start date in the fourth quarter of next year.
Shares climbed 9.6 percent, or 0.7p, to 8p.
The fall after the IPO was painful for Deliveroo’s largest shareholder, e-commerce giant Amazon, which has seen around £336 million wipe out the value of its 12.4 percent stake in the group.
Shares in takeout and other delivery companies have also come under pressure in hopes that the Omicron variant of Covid-19 won’t be as bad as initially feared, raising the risk of another shutdown and, by extension, the need to deliver food to people’s homes.
This broader service hit online grocer Ocado. The stock fell 2.7 percent, or 44.5p, to 1582p.
City financier Crispin Odey’s hedge fund, Odey Asset Management, took a nearly 6 percent stake in AO World, it announced yesterday.
Investors are looking for recovery stocks that have fallen recently, but will regain some value in the coming months.
Shares in AO World – which have fallen so much that they will soon exit the FTSE 250 – were up 3.6 percent, or 3.35p, to 96.95p.
The FTSE 100 rose 1.5 percent or 109.96 points to 7232.28 while the FTSE 250 climbed 1 percent or 235.25 points to 22881.33.
Decreasing fears of Omicron sent travel stocks soar: IAG, owner of British Airways, rose 8.1 percent or 10.64 pence to 142.34 pence, while Holiday Inn operator Intercontinental Hotels added 3.5 percent or 157 pence to 4701 pence.
Oil prices also recovered, with Brent oil back above $71 a barrel. The increase helped push Shell shares up 1.9 percent or 31.8 pence to 1678.4 pence, while BP rose 1.7 percent or 5.65 pence to 346.5 pence.
Hopes that Omicron won’t ruin the Christmas shopping season helped shares in High Street retailer and Primark owner AB Foods, which rose 2.1 percent or 40p to 1970p.
Mid-cap carrier Clarkson rose 4.8 percent, or 175p, to 3860pp after raising its full-year forecasts following “continued strong trading” in the second half.
The group now expects results for 2021 to “be ahead of current market expectations” with profits of at least £65 million.
South African miner Thungela Resources rose 15.8 percent, or 52.5p, to 385.9p amid rising demand as the global economy continued to recover from the Covid pandemic.