Deliveroo shares have plummeted on its stock market debut after a number of major UK investors expressed concerns about its gig economy worker model.
Shares in the food delivery business had been offered to investors at 390p each, but dived in early London trading to 275p at one stage, a 30% fall.
The company had initially hoped for a share price of up to 460p.
But in recent weeks a number of high-profile fund managers said said they would not be buying the shares.
Shares later recovered some earlier losses to trade down about 11%.
Deliveroo, which has not yet made a profit, said it had chosen the lower price due to “volatile” market conditions.
The investors were put off by factors including the working conditions of its riders and a lack of investor power over the direction of the company.
They include some of the UK’s biggest investment fund managers, including Aberdeen Standard, Aviva Investors, BMO Global, charity fund manager CCLA, Legal and General Investment Management and M&G,
Another reason they refused to invest was that founder Will Shu will have shares that gave him 20-times the voting power of other investors.
Deliveroo’s self-employed drivers have seen a boom in demand during the Covid-19 pandemic, bringing food from restaurants to housebound customers.
Deliveroo’s planned share sale had attracted much attention as it is one of the UK’s biggest flotation since Glencore’s in May 2011 and also the biggest technology platform float on the London Stock Exchange.
A share flotation sees the wider investment community assess the value of a company.
Initially, Deliveroo hoped to see that value as high as £8.8bn, based on a share price of 390-460p, it scaled that back to £7.6bn, but the share price drop wiped £2.28bn off that.