Delivery Hero CEO apologises on Twitter after shares plummet

Shares in Delivery Hero fell over 59 per cent last week to €41; shares in Ocado were down 9 per cent to 1,293.50p ; and shares in MeaTech nudged up 8.5 per cent to $5.66.

Shares in Delivery Hero plunged dramatically this week prompting its CEO to take to Twitter to apologise to investors following earnings guidance, which fell below expectations.

Shares in Delivery Hero fell over 59 per cent last week to €41, according to the Future Food Finance FoodTech Index.

Niklas Oestberg, Delivery Hero’s CEO and co-founder, posted on Twitter on February 11: “Today our share price dropped 30 per cent! I’m truly sorry for all shareholders! I’m in your boat. We will not change our strategy because of the drop but we will work even harder to prove our investment strategy is going to pay off.”

The share price fall came after The European delivery firm, which performed well during Covid, reported fourth quarter numbers and earnings guidance for 2022.

It said in the fourth quarter, Gross Merchandise Value (GMV)- an important measure of sales growth- upped 39 per cent on the year to €9.64 while the numbers of orders jumped 27 per cent to 775.5m over the year.

Revenue was up to €1.92bn from €1.15bn a year earlier in the quarter. However, the numbers fell below analysts’ expectations.

Delivery Hero said it expected GMV to be between €44bn to €45bn for the year 2022, below analysts’ expectations. 

Delivery Hero said it still expected to break even for the first time in the second half of 2022.

But its forecast adjusted earnings before interest, taxes, depreciation, and amortisation/gross merchandise value (EBITDA/GMV) margin of around -1.0 per cent to -1.2 per cent for the full year compared to -0.9 per cent forecast by analysts.

"Following the very disappointing guidance provided by Delivery Hero, we understand that Ebitda will remain deeply negative in 2022 in the range of €775m-€865m," Bryan Garnier analysts said.

“It only takes a small bump in the road to puncture sentiment around the pandemic winners like Delivery Hero, and the projections for 2022 are somewhat underwhelming,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told CNBC.

“There is heightened sensitivity surrounding delivery companies as workers return to offices and restaurants fill up with people desperate to jump start their social lives,” she added.

The German food delivery firm has lost roughly two-thirds of its value in the last 12 months, while other delivery companies like Deliveroo and Just Eat Takeaway have also big share prices falls. 

Delivery Hero has recently taken a stake in Spanish peer Glovo, and sold down its holding in Latin-American company Rappi and has also announced that it is looking to build out an ads business as well as a buy-now-pay-later service.

Elsewhere this week, shares in Ocado were down 9 per cent to 1,293.50p while shares in MeaTech nudged up 8.5 per cent to $5.66.