delivery service
Delivery Hero: Biggest price drop since Wirecard – financial supervisory authority determined
It’s been a pitch-black week for Delivery Hero. The share price fell by more than 30 percent. Now the Bafin is also investigating.
© Britta Pedersen / DPA
Even the inclusion of Delivery Hero in the Dax caused a lot of criticism. The share value of the delivery service collapsed by 30 percent on Friday. Now the banking supervisory authority Bafin is also investigating.
After selling off the day before, shares in the food delivery service Delivery Hero came under renewed pressure on Friday. More and more investors are apparently losing confidence in the prospects of the Dax group. With a minus of up to 13 percent, it went in the direction of the 40 euro mark. In two trading days, the titles have lost almost 40 percent.
Delivery Hero: Share falls by more than 30 percent
A disappointing outlook sobered investors on Thursday. The drop of a good 30 percent was one of the largest percentage daily losses in the history of the Dax. The stock market environment gives no room for error, wrote analyst Manuel Mühl from DZ Bank. The group must show a clear path to profitability and regain trust. Bank of America analyst Adrien de Saint Hilaire was pessimistic. He has lost confidence in Delivery Hero’s operating profit development, he wrote.
A number of analysts lowered their price targets on Friday, but some are still significantly above the current price. Goldman Sachs, for example, calculated a price target of 130 euros. At prices of a good 40 euros, these goals are actually clear buy recommendations.
Investors did not want to agree with this assessment before the weekend. Because the company’s expansion plans and the associated expenses are forcing market observers to sharply adjust their estimates downwards, as expert Mühl explained. He sees the fair value at 50 euros and recommends holding the papers. After the recent sell-off, the price adequately reflects the risks.
Bafin checks the price drop
As reported by the “Wirtschaftswoche”, the financial supervisory authority Bafin is reviewing the fall in the Delivery Hero share price. This was announced by a Bafin spokeswoman on Friday.
“We routinely look at trading activities, which also includes possible violations of transparency obligations,” said the Bafin spokeswoman. Delivery Hero did not want to comment on the request of the “Wirtschaftswoche”.
After the recent sell-off, Delivery Hero is only worth a little over 10 billion euros on the stock exchange. If you look at the freely tradable shares, the value of the free float, which is relevant for Dax membership, is less than 7 billion euros. The company is threatened with relegation to the MDax in March. In this way, Daimler Truck could be promoted to the leading index.
When Delivery Hero rose to the first stock exchange league in summer 2020, when the company replaced payment processor Wirecard, many experts criticized the move. Because the supplier group had never made a profit in its ongoing business since it was founded in 2011. Based on the current rules of Deutsche Börse, Delivery Hero would no longer be able to be included in the Dax. For this, a candidate must have achieved earnings before interest, taxes, depreciation and amortization for two years in a row.