Why GrubHub Share Prices Have Tanked In 2022
You might think Grubhub's shareholders would have been delighted when earlier this week, CNBC reported that shares of its parent company, Just Eat Takeaway, rose 12%. Unfortunately, it's not so much a win for investors as it is a slight respite from a massive overall decline in Just Eat Takeaway's share price. This 12% uptick, which is already trending downward, hardly makes an impact when you take into consideration that the company has had steadily declining share prices since October 2020, per Yahoo Finance. Shares have been trading today (June 8) in the vicinity of $21 to $23, whereas at the start of 2022, shares were trading at close to $50, and throughout October 2020, they were trading at no less than $100.
Then, there's the potentially sobering fact that share prices only began emerging from their five-year low of $17.82 after Just Eat Takeaway announced in late April that it was seeking to unload all or some of its interest in Grubhub, per CNBC. You see, Grubhub has been an overall disappointment to its shareholders since Just Eat, a Dutch company and one of the largest food delivery companies in the world, acquired the delivery app for $7.3 billion. The transaction took place in 2020, with the upshot being that Grubhub shareholders would now be shareholders of its parent company. Spoiler alert: It didn't take long for remorse to set in. But that's just one reason Grubhub's shares have been tanking throughout 2022.
Shareholders allege Grubhub failed them
Like many a classic tragedy, Grubhub's arc began auspiciously. When the food delivery platform went public in 2014, enthusiastic investors drove share prices up, up, and away, per NASDAQ. Midway through 2020, pandemic-related lockdowns had turned the food ordering industry into a veritable money-printing machine, per BNN. So, in a somewhat predictable move, Grubhub's shareholders voted near-unanimously for the company to be acquired by Just Eat Takeaway for the sizeable sum of $7.3 billion (via CNBC). With that, Grubhub shareholders became shareholders in this enormous parent company.
One year later, however, buyer's remorse devolved into 14 shareholder lawsuits against Grubhub and its management, alleging, among other things, that their endorsement of the acquisition violated their fiduciary duty to the shareholders' detriment, per QSR. In response to these and other developments, including calls from one of the company's biggest investors to sell off Grubhub, management began exploring a possible sale in April 2022, per CNBC.
As one might expect, stock prices surged, according to Seeking Alpha. And then ... not so much. Plus, it didn't exactly help that Grubhub founder Matt Maloney had been considering — only to ultimately abandon — immediate plans to enter as the white knight (per PYMNTS). Stay tuned, because as the share prices dwindle, it's possible that Maloney could return on his horse and buy the company back.