Why did Delivery Hero stock crash?

Delivery Hero Stock Crashes 9% After Taiwan Regulators Halt Foodpanda Sale

German-based online food delivery platform Delivery Hero experienced a significant setback on Friday, leading to a sharp decline in its stock price. The company’s shares plummeted by as much as 9% to €26 on the Frankfurt Stock Exchange, wiping out billions of euros in market value.

The trigger for this stock crash was the announcement by Taiwanese regulators that they had halted the sale of Delivery Hero’s Foodpanda unit to Uber. The deal, which was valued at approximately $2 billion, was intended to create a dominant force in the Taiwanese food delivery market. However, the Taiwanese Fair Trade Commission expressed concerns about the potential for a monopoly, arguing that the merger would reduce competition and harm consumers.

The decision by Taiwanese regulators came as a major blow to Delivery Hero, which has been struggling to turn a profit despite rapid revenue growth. The company had hoped that the sale of Foodpanda would provide it with a much-needed cash injection and help it consolidate its position in Asia.

The news of the regulatory setback has raised concerns among investors about Delivery Hero’s future prospects. The company has been facing intense competition from rivals such as Uber Eats, DoorDash, and Just Eat Takeaway.com, and it has yet to demonstrate a clear path to profitability.

In addition, Delivery Hero’s stock has been under pressure in recent months due to concerns about rising inflation and the impact of the war in Ukraine on the global economy. The company’s exposure to emerging markets, where it generates a significant portion of its revenue, has also been seen as a risk factor.

The stock crash on Friday marks a major setback for Delivery Hero and its investors. The company’s future prospects remain uncertain, and it will need to find a way to address the regulatory challenges and competitive pressures it faces in order to rebuild investor confidence.