Delivery Hero Suffers Major Stock Drop

The CEO apologized to company shareholders.

The CEO apologized to company shareholders.

After a recent earnings guidance report, European food delivery company Delivery Hero suffered a severe drop in its stock values, with shares dropping approximately 30%. The company actually did fairly well for the fourth quarter, but a lessened outlook for the new fiscal year prompted a panic sell-off. Since Wednesday, Delivery Hero’s overall market value has dropped by about $6.8 billion.

“Today our share price dropped 30%! I’m truly sorry for all shareholders! I’m in your boat,” Niklas Ostberg, Delivery Hero’s CEO, tweeted Thursday.

“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,” he added.

Delivery Hero saw a major surge in business and value at the height of the COVID-19 pandemic as scores of people were ordering takeout from home in quarantine. As COVID restrictions have started to loosen around the world, however, many delivery companies like Delivery Hero have seen their gains start to even out, made worse by ongoing threats of inflation and interest rate hikes. These two factors together have forced these companies to post more realistic outlooks for 2022, which investors aren’t happy about.

“There’s nothing that halts a growth story in its tracks quite like an outlook which doesn’t promise the kind of growth that investors had been banking on,” Danni Hewson, financial analyst at AJ Bell, told CNBC.

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