Shares of Deliveroo, a third party delivery service backed by Amazon, fell by 30% in the company’s initial public stock offering on London’s Stock Exchange amidst concerns over its business model.
The company’s stock price fell to 275 pence ($3.79) a share after its debut earlier this morning. The sharp decrease in shares also brought down shares in rival company Just Eat Takeaway.com, which fell by 1.75% amid the news.
Investors balked at the IPO after Deliveroo lowered its opening price range to 390 pence a share ($5.37), causing funds like Aberdeen Standard Life and Legal & General Investment Management to take their investments else where. News of a strike by Deliveroo drivers slated for next week has also contributed to the slump in share prices.
Investors in the U.K. have also raised questions about the structure of Deliveroo’s IPO, which is set up as a dual-class business. This gives majority power to Chief Executive Will Shu, who will hold this power for the first three years of the offering.
Dual-class structures are common for U.S. based businesses, but are less common in Europe and often seen as taking power away from shareholders.