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Pressure Builds on Just Eat’s Board After $16 Million Ski Trip

Pressure Builds on Just Eat’s Board After $16 Million Ski Trip

Fresh from taking his company on a Swiss ski trip, Just Eat Takeaway.com NV Chief Executive Officer Jitse Groen is heading to New York to meet investors after a collapsing share price and the prospect of complaints about the company’s management at the annual general meeting.

Lucerne Capital Management said Thursday it planned to vote against the re-appointment of the food delivery company’s chief financial officer and supervisory board in order to “send a clear message to the board expressing our disappointment.” That comes as Groen alerted shareholders that he will travel to New York for investor meetings next Thursday, giving about a week of advanced notice, according to a person familiar with the matter.

Just Eat’s shares have plunged nearly 70% over the past year as investors lost faith in the company’s strategy. It said last October it expected newly-acquired Grubhub -- bought for $7.3 billion -- to be part of industry consolidation, but there are currently no active conversations about the unit, another person familiar said. That status could change as the company’s process remains ongoing. 

Pressure Builds on Just Eat’s Board After $16 Million Ski Trip

“The share price is under absolutely enormous pressure,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

The annual skiing trip was budgeted for 15 million euros ($16 million), according to the person. Some 5,400 staffers arrived at the village of Arosa for four-day shifts on the slopes in an annual event that culminated Tuesday. 

The outing was canceled previously because of the pandemic, but the company was determined to bring it back, according to a spokesperson. “We understand these are challenging times, but exactly because of this, it is even more important to organize Snow Fest and show our employees we value them and their hard work,” the representative added. 

They declined to comment on the status of talks about Grubhub or on the ski trip’s budget. The representative also said, when asked about Groen’s travel to New York, that the company has ongoing interactions with investors and it’s common to meet after trading updates.

Massive off-site events by technology companies are not unusual. For years, WeWork Inc. held famously raucous company-wide parties, and Salesforce Inc. recently signed a multi-year agreement for a 75-acre retreat property.  

“I can understand the negative investor sentiment given the performance of the equity and what is probably a widely held conviction of the relatively mediocre performance of the senior management,” said David Reynolds, an analyst for Davy. “This seems slightly ham-fisted from an investor-relations perspective.”

After demand for their services boomed in the pandemic thanks to shut-in consumers who drove up orders, food delivery companies have had to find ways to sustain that momentum. Deliveroo Plc reported first-quarter earnings on Tuesday that showed orders rose less than analysts expected. 

Investors are losing patience with fast-growing and loss-making technology companies, leading to a sell-off that has touched competitors including Delivery Hero SE.

JET executives will likely keep their roles following the shareholder vote on their reappointment at the May 4 AGM, said Clement Genelot, an analyst at Bryan Garnier. 

“A minority share of shareholders will vote against it just as a sign of disappointment or rebellion, but that’s only because the recovery of the business is still not complete,” he said.

Genelot added that observers should not expect action “around Grubhub at least before the end of this year, because it is all about finding a bidder.” 

The company reports first-quarter earnings on Wednesday. Analysts surveyed by Bloomberg are bracing for a loss this year of 238 million euros before interest, taxes, depreciation and amortization, with that swinging to 33 million euros in earnings next year. 

“All of the platforms have flagged that the first half of this year is going to be a tough period for them,” said HSBC analyst Andrew Porteous. Just Eat is “one where sentiment is probably the most depressed.”

©2022 Bloomberg L.P.