Summary
Founded in 2013 by Will Shu and Greg Orlowski, Deliveroo has grown to become one of the biggest online food delivery companies in the world, building its operations in other countries outside Great Britain like Italy, France, Belgium, Singapore, and even countries in Asia like Hong Kong, and in the Middle East like the United Arab Emirates, Qatar, and Kuwait. It also has a subsidiary operation called Deliveroo Editions that uses ghost kitchens to prepare and deliver food to customers.
The company went public on 31 March 2021 on the London Stock Exchange as Deliveroo Holdings Plc. However, it was a largely unsuccessful IPO, as factors like timing, pricing, and uncertain business prospects caused it to become London’s worst IPO since 2011. Thankfully, the company soon picked up, reaching its stock price all-time high in August later that year and stabilizing its position as one of the major online food delivery companies in the world.
If you are an investor who has been looking into buying some shares of Deliveroo or trading its CFD, this article is for you. In this guide, we will discuss how to buy Deliveroo (ROO) shares step-by-step, looking at the pros and cons of buying these shares, factors to consider before you purchase them, fees and commissions involved, and what traders on Quora and Reddit think about buying Deliveroo shares.
Thinking of how to buy shares in Deliveroo? Here are a few quick steps to follow:
- Select an Online Stockbroker
- Create a Brokerage Account
- Deposit Funds
- Buy Deliveroo Shares
- Manage your Deliveroo Positions
Let us go through some of the benefits and downsides of buying Deliveroo stocks.
Pros
- Good Addition to Trading Portfolio
- Good Company Business Model
- Fast Growing Company
Cons
- Historically Poor Performance
Buying shares involves some level of risk on the part of the trader. It is therefore important that you do your due diligence before you buy a single Deliveroo share. Here are some factors you should consider before you invest in Deliveroo shares with any broker.
Commissions & Fees
Apart from the cost of buying Deliveroo shares per time, you may have to pay fees and commissions depending on the broker you choose to trade with. The most likely fee you will come across is spread, which is the price difference between the ask and bid price of the Deliveroo shares. You may also pay commissions, currency conversion fees, and other non-trading fees depending on the broker.
Before you trade Deliveroo shares with a broker, check their website to see the fees and commissions they charge and if you are okay with them. You can also reach out to their customer service team if you still need some explanations.
Stock Brokers Regulation
Stock brokers are often regulated by financial authorities and other bodies within a country or region for various important reasons. These brokers have access to your money and private information, so it is important they abide by rules that prevent them from carrying out fraudulent activities with your money and personal data. Check that your broker is registered under the regulatory body within your region or country.
In the United States, the Financial Industry Regulatory Authority (FINRA) is the regulatory body directly responsible for regulating stock brokers under the oversight of the Securities and Exchange Commission (SEC). Other regulatory bodies include the Financial Conduct Authority (FCA) in the UK, and the Australian Securities and Investments Commission (ASIC) in Australia. Go through their websites and confirm that your broker is registered with them.
Trading Platforms
Trading platforms are computer software that brokers use to allow traders to access the stock market. These platforms also have tools like charts, news tabs, order types, and many others that make it easy to trade stocks regularly. The kind of trading platform you choose to trade Deliveroo stocks can seriously influence your trading experience. It is important you choose a trading platform that suits your trading needs and provides you with the tools you need to succeed as a trader.
Most brokers will offer either proprietary or third-party trading platforms to traders registered with them. You can use a demo account to try the trading platforms offered by the broker of your choice to see if you are comfortable with it before you register with them.
Leverage Availability
Leverage involves using borrowed funds to trade beyond what would be normally possible with your trading capital. Traders use leverage to increase their trading and profit potential, however, this form of trading could be problematic if you make a loss. Making a trading loss could mean you lose all your investment capital. To prevent this, many regulatory bodies place a limit on the amount of leverage you can take from a broker.
If you are interested in leverage trading, choose a broker that offers it to their registered traders. Also, when choosing a broker to buy Deliveroo shares with leverage, ensure they comply with the leverage limits set by the regulatory bodies, and that they have negative balance protection which prevents you from falling into debt.
It is also important to check for leverage if you are interested in trading CFDs. CFDs help you trade financial instruments (ROO stocks in this case) by predicting the price movement of the asset. CFD trading involves leverage, so be sure you are satisfied with the leverage the broker offers before you register with them.
Deliveroo Stock Performance
Before buying shares in Deliveroo, check their past and present stock performance. This can give you an understanding of the type of stocks you are trading and if it is a good fit for your portfolio. To do this, look at the price history of the stock on websites like Google Finance and Yahoo Finance. Go through some key financial metrics like earnings per share (EPS), price-to-earnings ratio (P/E), revenue growth, and profit margins.
Compare the stock performance and company’s financial health with other relevant benchmarks and competitors. For example, you compare it with the stock market indices and other companies within the same industry.
Deliveroo Past Dividends
Another factor to consider when buying Deliveroo shares is the amount of dividends they pay. At the time of writing, Deliveroo does not pay dividends to its shareholders, so don’t expect to receive any dividend payment if you choose to buy their stocks. Deliveroo has publicly stated on its website that they intend to “retain future earnings to finance the operation and expansion of the business” and that they do not “expect to declare or pay any cash dividends in the foreseeable future”.
Decide if this is a dealbreaker for you before proceeding to buy some shares.
A trading platform is a computer software used by brokers to connect traders to the stock market. There are two main kinds of trading platforms brokers offer: proprietary and third-party trading platforms. Proprietary platforms are designed by the broker and are exclusive to traders registered on the trading platform, while third-party platforms are open to all brokers and traders interested in using them.
Both proprietary and third-party platforms can be found on mobile and desktop devices.
Desktop Trading Platforms
Desktop trading platforms are trading platforms created for use on desktop devices like computers and laptops. These platforms are designed to offer a range of trading tools, real-time market data, and order execution capabilities. You can access complex charting tools, technical indicators, order execution tools, and customization, which is especially true on proprietary platforms.
These trading platforms have some advantages over mobile apps. They have larger screens and more enhanced displays that allow for a better overview of charts, indicators, news feeds, and other trading tools. They also allow traders to multitask for good workflow efficiency when trading. However, because you can’t always carry your personal computer around, it might be a bit difficult to trade with desktop platforms when you are always on the move.
Mobile Apps
Mobile apps are trading platforms you can operate on a mobile device, like your smartphone or tablet. These applications can be downloaded on the Google PlayStore, Apple Store, and other respective mobile stores for apps. Just like desktop platforms, you can access tools like trading charts, real-time market data, and order execution tools.
Due to the portable nature of mobile phones, mobile apps make trading Deliveroo shares easier and more convenient, especially if you are always on the move. You can see real-time notifications like normal notifications on your phone and react to them immediately. Brokers like eToro offer their proprietary trading platform on mobile apps, while brokers like FxPro and Pepperstone offer third-party platforms like MetaTrader 5.
Brokers often charge fees and commissions when buying Deliveroo shares. Although these fees and commissions are highly dependent on the broker, there are many common fees you will likely come across when you buy shares from these platforms. These fees are divided into two in this section: Trading and Non-trading fees.
Trading Fees
Trading fees are fees you pay when you trade or carry out transactions on a platform. Some common examples of trading fees are:
Spreads: This is used to refer to the difference in price between the bid and ask price of an asset, like Deliveroo shares. These price differences occur usually due to factors like market volatility, and a little markup added by brokers who provide liquidity and offer commission-free trading.
Commission: For brokers who choose the commission payment model, they take a small percentage out of most or every transaction you carry out on the platform. Check the broker’s website to see the percentages before you choose to trade with them. Some brokers like eToro and Capital.com are commission-free, which means that they do not charge a commission for trading on their platform.
Overnight Fees: These are fees you pay when you hold leveraged positions overnight. As explained earlier, leveraged trading involves borrowing money to open a position, so overnight fees act as interest on the loaned money for every day you hold on to the position. Overnight fees are dependent on the broker, so check your broker and be sure of what they charge before you start opening leveraged positions or trading share CFDs.
Non-Trading Fees
These are fees you pay on your trading account without transacting on the platform. Some examples are:
Inactivity Fees: These are fees you pay for leaving your account dormant for a long period, usually months. eToro charges a $10 fee for every month you don’t use your account after leaving it dormant for a year.
Currency Conversion Fees: You may need to convert your local currency into other currencies like Dollars, Pounds, and Euros, and this may cost you some charges. Some brokers do not charge this fee.
Deposit and Withdrawal Fees: These are fees you pay when you deposit and withdraw to and from your trading account.
About Deliveroo (ROO)
Deliveroo, an online food delivery company, was founded in 2013. Their mode of operation involves partnering up with restaurants to deliver food to customers in their homes. Customers can find a restaurant around them, make an order for the food they want, and wait for a Deliveroo dispatch rider to pick up the food when it’s ready and deliver it to them at home. They also have ‘dark kitchens’ or ‘ghost kitchens’, which are kitchens created solely for preparing meals for home delivery.
In 2021, after 8 years of operation, Deliveroo went public, getting listed on the London Stock Exchange, in an IPO that many analysts have referred to as one of the worst in London’s recent history. However, Deliveroo stocks grew in the next few months to 396 pence (£3.96) on the 16th of August, 2021, matching its initial IPO highest price.
Currently, there are 1,740,208,586 Deliveroo shares in issue, and with a share price of 112.9 pence (£1.129) at the time of writing, the market cap of all available Deliveroo shares is £1.829 Billion.
We went through Reddit and Quora, two of the biggest social communities on the internet to see what they thought about how to buy Deliveroo (ROO) shares and if they are worth buying.
Reddit is a social community dubbed “the front page of the internet” because of its users who are often more involved and can spot trends faster than most. We went through some insightful posts about Deliveroo shares, and we will share some of them here.
The first thread we saw was from a Redditor who moved from Brazil to London and was interested in Deliveroo shares. He gave a thorough analysis of why he was interested in buying Deliveroo shares and why he thought the company was a healthy choice. According to him, there were 4 solid reasons:
i) Deliveroo dominates its competition in London,
ii) Deliveroo promotes the gig economy,
iii) It offers new areas of growth, and
iv) It was profitable.
One Redditor disagreed with the original poster (OP), saying that Deliveroo wasn’t all he thought it was. He suggested that the OP leave the majority of his portfolio to the professionals and focus on learning about capital gains and how to make these gains long-term.
Quora
Quora, like Reddit, is a social community with hundreds of millions of users talking about a wide range of topics. We went through Quora threads to see what we could find about buying Deliveroo shares online.
The first thread we came across was a post by a Quora user who wanted to know why Deliveroo’s IPO was a failure. Another user responded, saying he thought it was weird when analysts call an IPO a failure because the price of stocks dropped the day after. According to this user, the opposite should be true. For this reason, he thought the Deliveroo IPO was more successful than analysts thought.
Another Quora user explained that the Deliveroo IPO failed because it was overpriced for a non-profit with publicity issues with pay. He also expressed pessimism and stated that he didn’t expect the price to go up later.
Bottom Line
Deliveroo is one of the biggest online delivery stores worldwide. This has made it a very valuable stock to trade. In this guide article, we discussed how to buy Deliveroo (ROO) shares including the pros and cons of trading them. We also went through the factors to look out for when buying Deliveroo shares, trading platforms to use, and fees and commissions to look out for when trading.
Investors on Reddit and Quora gave mixed feelings about trading the shares, as many were wary after the Deliveroo IPO flopped massively. It is important, however, that every trader looking to buy into Deliveroo shares should do their own research and determine for themselves if the stocks are worth trading.
Q & A
You can buy Deliveroo shares from any broker that offers access to the London Stock Exchange. Examples of these brokers include eToro and Capital.com.
The decision to buy Deliveroo shares should depend on your trading goals and solid advice from a professional trader and analyst.
You can buy Deliveroo shares by registering with a broker with access to the London Stock Exchange. Log into your account and search for Deliveroo using the name or ticker symbol (ROO).
Whether or not Deliveroo shares are a good buy is dependent on your trading goals and current market conditions.
The best way to buy Deliveroo shares is by registering with a broker that offers access to the London Stock Exchange and purchasing them.
You can incur both trading and non-trading fees when buying Deliveroo shares. Some fees you are likely to incur are spread, commissions, currency conversion fees, deposit and withdrawal fees, etc.
Yes, you can trade Deliveroo stocks as CFDs
The best leverage to trade Deliveroo stock is the one you are comfortable with. The leverage limit on shares by the FCA and most regulatory bodies is 1:5.
Yes, you can buy fractional shares of Deliveroo on brokers like eToro and Capital.com.
At the time of writing, there are 1,740,208,586 Deliveroo outstanding shares available in the stock market.
The total market capitalization of Deliveroo shares is £1.829 Billion at the time of writing.
The largest shareholder of Deliveroo is the Amazon Venture Capital which holds over 215 million shares or about 12.3% of all Deliveroo outstanding shares. Other major shareholders include DST Global (7.84%), T Rowe Price Associates, Inc. (7.60%), and FIL Investment Advisors (UK) Ltd. (6.70%).
Will Shu and Greg Orlowski founded Deliveroo in February 2013 in London, England.
Deliveroo became a public company on 31 March 2021.
The price of Deliveroo shares has dropped since the IPO by 72.3%. It was priced at 331 pence (£3.31) per share at its IPO on March 31, 2021. The stock gained as much as 17.8% on its first day of trading, reaching a high of 390 pence (£3.90) per share before it closed at 287 pence (£2.87). However, it has since fallen and is currently trading at 112.9 pence (£1.129) per share.
At the time of writing, the current price of Deliveroo shares is 112.90 pence (£1.129) per share.
