Deliveroo PLC (LSE:ROO) (LSE:ROO) shares returned to their initial public offering (IPO) price on Tuesday morning, providing some relief for investors that were burned by the food delivery firm’s lacklustre debut in March.
In late morning trading, Deliveroo shares were flat at 388.6p after briefly hitting an all-time high of 393.9p earlier in the day. This is the first session in which the shares have traded above the IPO price of 390p per share.
READ: Deliveroo finds market hard to please despite strong set of interim results
The 390p price was itself at the low end of Deliveroo’s expected range when it prepared for its float in March, however, even this proved wildly optimistic for the firm, which saw the shares slump on its first day of trading on March 31 to close at around 287p, a decline of around 26%.
Following the lacklustre debut, the shares continued to sink over following sessions, reaching an all-time low of 228p on April 26, a 41.5% discount to the IPO price.
However, since then the shares have mounted an uneven recovery, receiving a boost on June 24 after the company managed to fend off a legal challenge by its riders to be classed as employees rather than self-employed, a move that would have entailed higher costs in employee benefits.
Even more recently, the company enjoyed a lift last Friday after German rival Delivery Hero (ETR:DHER, OTCQX:DLVHF) said it was considering making an offer for the group, potentially to snap up its operation given the weak share price performance.
However, while Deliveroo may finally be back at square one, the low levels of enthusiasm in the market to its debut, which was touted as one of the hottest IPOs of the year, as well as questions about its future growth potential and a possible incoming bid may make shareholders reconsider whether the stock can rise any further.
Given the somewhat flat performance in the shares on Tuesday after the return to IPO prices, investors may be looking to either cut their losses or see if a rival can offer a better deal than the market makers.