Deliveroo was tipped to be the hottest UK IPO (Initial Public Offering) since Royal Mail. Unfortunately for early backers – the ‘unconditional’ IPO saw Deliveroo shares plummet by 30% by end of its first day of trading.
If, however, you think that this represents a way to buy Deliveroo shares at a discount – read on. In this guide, we show you how to buy Deliveroo shares online in the UK and which brokers you can invest on.
Table of Contents
Step 1: Where to Buy Deliveroo Shares UK?
Your first port of call will be to find a UK stock broker or investment app that allows you to buy Deliveroo shares online. Take note, its recent IPO was an ‘unconditional’ listing – so this was only available to institutional investors. As a retail investor, you will have to wait until the stocks hit the secondary market – which is expected to happen in early April.
Nevertheless, the following brokers are arguably the best providers in the investment scene that will allow you to trade or buy Deliveroo shares in the UK.
1. eToro – Best Place to Buy Deliveroo Shares in the UK
eToro is an FCA-regulated stock broker that has over 20 million clients. Most users of the platform are retail clients that have little to no experience of investing online. As such, eToro is a great option if you're seeking a user-friendly broker. In total, eToro gives you access to over 2,400 shares from 17 marketplaces. On top of shares listed on the London Stock Exchange, this also includes the US, Germany, France, Greece, Sweden, Hong Kong, and more.
Once Deliveroo shares are listed on the London Stock Exchange, eToro will open a marketplace. When it does, you will be able to buy Deliveroo shares without paying any dealing fees or commissions. Furthermore, eToro waivers stamp duty tax (0.5%) - which is payable when you buy shares listed on the London Stock Exchange. In terms of minimums, this stands at just $50 per stock trade at eToro - which is about £35.
In addition to shares, eToro also offers ETFs and cryptocurrencies, as well as CFD markets on forex, indices, and commodities. There is also a passive investment tool called Copy Trading - which allows you to copy the portfolio of an experienced eToro trader. CopyPortfolios are also offered - which are professionally-managed investments maintained by the team at eToro.
When it comes to opening an account, this typically takes less than 10 minutes. All you need to do is provide some personal information and upload a copy of your passport or driver's license. You can then deposit funds with your UK debit/credit card or bank account. E-wallets such as Paypal and Skrill are also supported. Finally, not only is eToro authorized by the FCA, but your capital is protected by the FSCS scheme.
- Social and copy trasing tools
- 0% commission on shares and ETFs
- Over 800 shares to buy or trade as CFDs
- FCA licensed
- MT4/5 not available
2. Capital.com - User-Friendly CFD Trading Platform With £20 Minimum
Once Deliveroo shares hit the London Stock Exchange - Capital.com is another top-rated platform that will give you access to this market. However, unlike eToro, you won't be buying the shares in the traditional sense. Instead, Capital.com will allow you to 'trade' Deliveroo stocks via CFDs (contracts-for-differences). In simple terms, this means that you can speculate on the future price of Deliveroo without owning the underlying stocks.
When doing this through Capital.com, several trading features will be available to you. For example, Capital.com allows you to apply leverage when trading stock CFDs. As per UK limits, this permits leverage of up to 1:5. As such, a £200 stake on Deliveroo stock CFDs will boost your trade size to £1,000. Additionally, Capital.com allows you to profit from both rising and falling markets.
This means that you have the option of short-selling Deliveroo shares - should you think that the stocks will continue to tank. You can do this at the click of a button via a sell order - so there is no requirement to 'borrow' the stocks like you would at a traditional broker. Much like eToro, Capital.com does not charge any trading commissions - so it's only the spread that you need to take into account.
Signing up to Capital.com takes minutes and best of all - the minimum deposit is just £20. This allows you to have a go at trading Deliveroo CFDs without an inconsequential amount of capital. There is also a demo account facility at Capital.com - should you wish to trade in a risk-free environment. In terms of safety, Capital.com is authorized and regulated by the FCA - so your money is in safe hands at all times.
- Get started with just £20
- No commissions and tight spreads
- Great for newbies
- Minimum £250 deposit when using a bank transfer
Step 2: Are Deliveroo Shares Worth Buying?
As we noted earlier, Deliveroo recently had its unconditional IPO – which resulted in the stocks losing 30% on their first day of trading.
This doesn’t mean that Deliveroo isn’t a good buy – but it should be a firm reminder that research is crucial before investing in an unproven firm.
With this in mind, in the sections below we explore whether or not Deliveroo shares represent a viable long-term investment.
Deliveroo IPO: Current State of Play
Deliveroo had its unconditional IPO on March 31st, 2021. This was tipped to be the biggest IPO since Royal Mail’s 2013 listing. After all, at an issue price of 390p – this valued Deliveroo at £8.8 billion.
What was to follow was one of the worst IPO listings of all time – with Deliveroo shares dropped to lows of 271p – a decline of 30%. At the time of writing on April 7th – the shares have recovered to a mere 280p. It is important to note that as an unconditional IPO, access was only given to the institutional space.
67% of retail investor accounts lose money when trading CFDs with this provider.
As such, if you’re a casual investor, you won’t be able to buy Deliveroo shares in the UK until they hit the secondary market. When they do, you will be able to buy and sell Deliveroo stocks at the click of a button through your chosen stock broker.
How Much are Deliveroo Shares?
At the time of writing, Deliveroo shares are trading outside of the secondary market at 280p each. This amounts to 28% less than the initial IPO price of 390p. In turn, this gives Deliveroo a market capitalization of £5.1 billion – which is a significant drop from its IPO valuation of £8.8 billion.
Does Deliveroo Pay Dividends?
Deliveroo does not pay dividends – which is standard for a company that’s still at the very start of its stock exchange journey. Like most tech startups, all retained profits will be reinvested back into the company. If you do buy Deliveroo shares, this means that the primary focus will be on capital gains via an increased stock price.
Should I Buy Deliveroo Shares?
In order to determine whether Deliveroo shares are a buy, you need to look at the fundamentals. Sure, the shares crashed by 30% on day one of the IPO listing. But, this doesn’t mean that Deliveroo doesn’t represent a viable investment. On the contrary, you stand the chance of investing at a much lower share price than those that backed the IPO.
To help clear the mist, below we discuss some of the main considerations that you need to make before adding Deliveroo shares to your stock portfolio.
First and foremost, it must be noted that the timing of the Deliveroo IPO was badly considered by management. This is because the UK is slowly but surely coming out of lockdown measures and thus – restaurants and other food establishments will once again reopen their doors to the public.
As a result of this, demand for home food deliveries will likely begin to fall. This will, of course, hit Deliveroo’s bottom line – much like it will with major competitors Uber Eats and Just Eat. Perhaps this was one of the main drives behind the IPO capitulation.
Poor Working Conditions
There are ongoing concerns from ethical investors that Deliveroo employees are subjected to poor working conditions. At the forefront of this is a recent study by the Bureau of Investigative Journalism that one-third of Deliveroo employees are earning less than the minimum wage.
This is why many large-scale players – such as Aviva and Legal General, announced that they would not be investing in the Deliveroo IPO.
No FTSE 100 Listing
Even taking into account is capitulated market valuation, the firm is still worth enough to be listed on the FTSE 100 index. However, as management at Deliveroo are opting for a dual-listing, this means that the shares are not eligible for the FTSE. This is a major drawback back for investors.
The reason for this is that large-scale ETFs that track the FTSE 100, will personally buy shares in all companies that form the index. In turn, this has the desired effect of generating high levels of liquidity and generally speaking – increases demand for the respective shares. However, Deliveroo will not benefit from this.
Competition is Fierce
There is no denying that the online and app-based food delivery industry is growing year-on-year. This is the case not only in the UK – but globally. However, Deliveroo isn’t the only player in this space. On the contrary, there are other major home food delivery companies to consider – some of which have a much larger market share.
In particular, Just Eat has a wider market reach in the UK than Deliveroo. There is also strong competition from Uber Eats – which has access to much larger financial resources and is active on more of a global scale.
Invest at a Discount
While many investors in the UK will be put off by the 30% IPO collapse, others will view this as a great way to buy Deliveroo shares at a major discount.
After all, Deliveroo still has a solid business model that operates in an ever-growing market. If you believe that in the long-term the shares will eventually recover – then now is as good a time as any to make a purchase.
Step 3: Open a Brokerage Account and Make a Deposit
Once you have researched the ins and outs of Deliveroo and decided that you want to process with an investment – it’s then time to open a brokerage account. As we covered earlier, eToro is the best stock trading platform in the UK to buy shares – as you won’t pay any commission, dealing fees, or stamp duty tax when you buy the best shares.
As such, the guidelines below show you how to open an account and deposit funds at top-rated broker eToro.
- So, head over to the eToro website and click on the ‘Join Now’ button.
- You will then be taken through the registration process and asked to enter your personal information and contact details.
- You also need to verify your mobile number and email address, and choose a username and password.
Then, eToro will ask you to upload a copy of your passport or driver’s license. This is because the broker is regulated by the FCA and as such – must comply with anti-money laundering laws. You can actually upload your ID documents at a later date – but this does need to be done before you can make a withdrawal or deposit more than $2,250.
- Now it’s time to make a deposit.
- At eToro, you can instantly deposit funds with a debit/credit card, Paypal, Skrill, or Neteller
- Bank transfers are also supported
Once you have made a deposit you can then proceed to the final step of the process – which is to buy Deliveroo shares.
Step 4: Buy Deliveroo Shares
If at the time of reading this guide Deliveroo shares have hit the secondary market – you can process to make a purchase.
67% of retail investor accounts lose money when trading CFDs with this provider.
Until then, you will need to wait.
- Once the shares do become available at eToro, all you need to do is search for ‘Deliveroo’.
- Then, you will be asked to set up a ‘buy order’.
- This simply requires you to enter the amount of money that you want to invest into Deliveroo shares.
- Take note, eToro uses US dollars as a base currency and the minimum investment per stock is $50 (about £35).
Finally, click on the ‘Set Order’ button to complete your Deliveroo investment.
Are Deliveroo Shares a Buy or Sell?
The general market sentiment at the moment is that the Delivroo IPO was heavily overvalued and overhyped. This mainly centers on its initial listing price of 390p per share – which gave Deliveroo a market valuation of £8.8 billion. This is especially the case when you consider that Deliveroo is yet to make a profit.
On the contrary, the firm reported a loss of over £223 million in 2020. This is particularly concerning when you consider that the food delivery space was booming last year as per the coronavirus restrictions. With the UK slowly but surely coming out of lockdown – restaurants will eventually reopen and less people will be motivated to eat at home.
On the flip side, there is every chance that Deliveroo shares will at some point recover and perhaps exceed the 390p level. If this is the case, then you stand the chance to invest at a major discount based on current prices.
Buy Deliveroo Shares with 0% Fees
In summary, the unconditional Deliveroo IPO was nothing short of a major failure. Although the IPO was expected to be the hottest listing since Royal Mail, the stocks dropped by 30% on the first day of trading. Nevertheless, if you want to buy Deliveroo shares online in the UK – completing the process at eToro is simple.
The FCA broker allows you to invest from just $50 (about £35) and you won’t pay any dealing fees or stamp duty when you buy Deliveroo shares. You will, however, need to wait until the shares hit the secondary market before you can make an investment.
eToro: Buy Shares with 0% Commission
- Buy over 800 global shares
- No commission and tight spreads
- Social and copy trading tools
- Accepts PayPal
- FCA regulated
Can I buy Deliveroo shares?
Yes, you can buy Deliveroo shares online in the UK. But, you will need to wait until the shares are listed on the London Stock Exchange. When this does happen, all you need to do is open an account with an FCA broker like eToro.
Does Deliveroo make a profit
Even with an initial IPO valuation of £8.8 billion, Deliveroo is yet to make a profit. In fact, the home delivery firm made a loss of over £223 million in 2020.
Does Deliveroo pay dividends?
No, Deliveroo does not pay dividends. The firm is yet to make a profit, so all retained revenues are reinvested back into the growth of Deliveroo. If you're a dividend-seeking investor, Deliveroo will not be right for your stock portfolio as it could be many years before the shares generate income.
What is the minimum amount I can invest in Deliveroo shares?
This depends on the stock broker that you decide to buy Deliveroo shares from. If using popular FCA broker eToro, the minimum stock investment is just $50 - or about £35.
Can you short-sell Deliveroo shares?
If you want to short-sell Deliveroo shares because you think the firm is overvalued, this can be achieved by using a broker that offers stock CFDs. All you need to do is place a sell order and you will profit if Deliveroo shares drop in value.
What was the Deliveroo IPO price?
Deliveroo shares opened at 390p when the unconditional IPO went live on March 31st, 2020.
Who founded Deliveroo?
'Deliveroo was founded by current CEO William Shu.
Can I add Deliveroo shares to an ISA?
Yes, once Deliveroo shares hit the secondary market - you can invest via your Stocks and Shares ISA.
How much is Deliveroo worth?
At the time of writing on April 7th, 2021 - Deliveroo has a market valuation of £5.1 billion.