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Who’s hungry? Apparently, Uber. News leaked yesterday that the ride-share-turned-high-tech delivery company made an offer to buy Grubhub. A source who asked to remain nameless (coward) said it was an all-stock offer of 2.15 shares of Uber for every share of Grubhub…and 10% off first-time orders.
The news sent Grubhub’s stock price skyrocketing 38% at one point, resulting in trading being halted. It finished up 29% on the day. Uber’s stock price rose as well, up 2.4% on the day.
What, no tip?
Before you start poppin’ ketchup packets, let’s be clear that Grubhub did not accept the offer. On the rumors, however, the delivery company’s market cap blew up to $5.8B.
Uber’s supposed new boo issued a statement denying it was for sale earlier this year, but has apparently been talking to Uber since this time last year on combining forces. But the OG food delivery service has kept its dealings close to the chest.
In its statement on the purchase, the company said it is looking for “value-enhancing opportunities” and that consolidation in the industry “makes sense”. Geez Grubhub…thirst much?
There’s never a good time
After reporting net loss of $2.9B for Q1, Uber is looking to enhance one of the few bright spots in its business. It’s UberEats business was up 50% YoY. The optics of the alleged deal scream “Travis Kalanick.”
This latest announcement comes after Uber announced it is cutting 3.7k jobs or 14% of its workforce and is making a $170M investment in Lime…talk about throwing salt in the wound.
Call me crazy, but I won’t be surprised if the FTC gets involved in this deal (assuming an offer gets approved). Two competitors joining forces with limited competition from DoorDash and Postmates would give “Uberhub” roughly a 50% share of the delivery business.
We’ve seen this movie before… Disney and Fox…T-Mobile and Sprint…
Such a powerhouse could run up service fees for both restaurants and customers.
Water Cooler Talking Point(s)
💧 “Don’t worry folks, I have an in at the NY DA’s office. Those service fees aren’t going anywhere!” (Ian, The Water Coolest HQ)
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