Deliveroo Climbs as Retail Investors Start Trading Stock

Deliveroo Holdings Plc, which collapsed in its London debut last week after a 1.5 billion-pound ($2.1 billion) initial public offering, gained as much as 4.2% on Wednesday as retail investors began to trade the company’s shares.

The stock traded 2.6% higher at 287.25 pence as of 11:11 a.m. in the U.K., which is well below the IPO price of 390 pence a share.

Although the food-delivery startup listed publicly on the standard segment of the London Stock Exchange, trading remained conditional, meaning only institutional investors were allowed to buy and sell the stock. Until now, retail shareholders had been forced to sit on the sidelines as shares slumped 28% since Deliveroo’s March 31 debut.

Deliveroo Climbs as Retail Investors Start Trading Stock

The IPO was beset by public criticism from some of the U.K.’s biggest institutional funds, because of governance issues related to its dual-class share structure as well as concerns about Deliveroo’s gig-economy business model. Hundreds of the company’s riders are expected to protest across the U.K. on Wednesday to lobby for better working conditions.

Retail investors “finally have a ‘get out of jail’ card, but it seems for now that many have kept it in their back pocket, waiting it out for prices to stabilize,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown Plc, said in a note.

Deliveroo partnered with PrimaryBid Ltd., a platform that connects share sales to private investors, for its 50 million-pound community offering, which was open to customers on its food-delivery app. That portion of the share sale was taken up by about 70,000 people.

Top executives at trading platforms AJ Bell Plc, Hargreaves Lansdown and Interactive Investor Ltd. have been urging U.K. companies to open up their IPOs to retail buyers, who have largely been left out. Deliveroo was one of the first large issuers in London make room in its initial share sale for mom and pop investors.

“It is clear that IPOs should offer a much more level playing field from day one for all classes of investors,” rather than leaving individual buyers locked out, Streeter said.

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