Tue, 06 May 2025

Tue, 06 May 2025 Deliveroo deal shows UK still can't hang on to big firms

The takeover by a US firm shows the differing fortunes and attractions of US and UK stock markets.

* DoorDash is now worth 35 times what it was when Deliveroo listed on the London stock market four years ago.
* The value of a share in DoorDash has risen by 84%, while a share in Deliveroo has fallen by 56%.
* The takeover bid was partly made possible by DoorDash's access to US capital markets, which are more lucrative than UK markets.
* Companies are increasingly shunning the London stock market in favour of a US listing due to higher valuations and better returns on investment.
* The US is home to many of the world's most successful companies, such as Amazon and Apple, which contributes to its higher valuation.
* The lack of demand for UK stocks from investors has also contributed to the disparity, with pension funds preferring US markets.
* The government's "Edinburgh Reforms" aim to make listing in the UK more attractive by reducing the proportion of a company available for sale and retaining voting power for founders.
* Despite this, some big companies like Shell are considering a move to the US market due to its higher valuation.
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