Delivery Hero’s Slump Takes Down Another Pandemic Favorite

Delivery Hero’s Slump Takes Down Another Pandemic Favorite

(Bloomberg) —

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Delivery Hero SE’s share price crash this week was among the biggest one-day wipe outs recorded on Germany’s benchmark DAX index in recent years.

Shares in the Berlin-based food-delivery firm dropped 30% after it published fourth-quarter results and an outlook that missed expectations. Only scandal-hit payment processing company Wirecard AG’s 71% dive was worse.

Delivery Hero’s precipitous tumble was the latest savaging for a pandemic-favorite stock as more governments lift coronavirus restrictions, workers abandon home offices, and leisure travel picks up.

Shares in the fitness company Peloton Interactive and streaming video service Netflix, as well as food-delivery peers Just Eat NV and Deliveroo Plc, have also been ravaged recently.

In the case of Delivery Hero, which puts burgers, coffee, groceries and other products into the hands of buyers in dozens of countries with a few clicks, more than 5 billion euros ($5.7 billion) in value was wiped out on Thursday.

The stock extended its drop on Friday to 39%, or 6.5 billion euros in total, marking the company’s worst two-day move since its 2017 listing, leading the slump of the broader food-delivery sector.

A $6 Billion Wipe-out Was an Omen for Food Delivery Stocks

When Wirecard imploded in 2019 and was subsequently kicked out of the DAX index, Delivery Hero took its place.

Delivery Hero’s share price peaked in early 2021, when Germany was in the middle of its deadliest Covid wave and much of Europe was in lockdown.

Heavyweights like SAP AG or Volkswagen AG have seen larger amounts of market value destroyed in a single day, even if Delivery Hero’s loss in percentage terms was higher.

Analysts covering the stock have already taken action, slashing the average price target by almost 40%. Still, 19 out of the 25 analysts tracked by Bloomberg rate the stock a buy.

Delivery Hero’s founder and CEO Niklas Oestberg tweeted he’s “truly sorry for all shareholders” and that the company will work even harder to prove its investment strategy is going to pay off.

“I’m in your boat,” he added.

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