Delivery Hero has no business in the Dax

Hardly any other start-up makes it clear that the hype surrounding tech companies is now over. But the exclusion of the delivery platform operator from the Dax is also overdue for other reasons.

On June 20, Delivery Hero will be kicked out of the Dax. One reason is the price corrections in tech stocks. Investors' expectations were too great, and the actual company figures too poor. The fact that the delivery platform operator now has to leave the most important German index again is simply logical.

Two years ago, when Delivery Hero was promoted to the Dax, the world was still a different place and the joy of the start-up scene was great. Finally, a young company that had made it to the top - and at least the start-up's share price performance in 2020 and 2021, i.e. in the midst of the peak phase of the Corona crisis, proved these voices right. The company's share price rose sharply, and its stock market value at times exceeded 36 billion euros. Those who invested in tech stocks profited from the hype. But as early as February of this year, the company's share price plummeted by 30 percent. Investors reacted to the fact that the start-up's losses were higher than expected. Today, the market capitalization is just over 8.3 billion euros.

Delivery Hero recently made enormous losses

Admittedly, Delivery Hero is far from the only tech company struggling with falling share prices. In view of rising inflation, there is a sell-off mood on the stock markets. Technology stocks around the world are under pressure.

Delivery Hero, however, is also highly loss-making. Although the start-up continued to grow in 2021, losses are also increasing - the loss before income taxes amounted to 958 million euros. With such company figures, a promotion to the Dax would not even be possible nowadays. After the Wirecard case, Deutsche Börse changed its conditions: Dax members must show positive earnings before interest, taxes, depreciation and amortization (EBITDA) for at least two years. Delivery Hero is far from that.

CEO Östberg stayed away from shareholder meeting

Such corporate key figures, however, are not the only reason why the company has no business being in the Dax. CEO Niklas Östberg didn't even think it was necessary to face questions from his shareholders at the beginning of the year - he simply stayed away from a shareholders' meeting. On Linkedin, he defended the move afterwards. "I like to focus on what adds the most value for shareholders, and didn't think prepared Q&A provided the most value. If you as a shareholder have a question, I am happy to answer it at any time, not just once a year," he wrote.

Of course, Östberg is not required to attend such meetings. But it is also not written anywhere that he only has to read off answers there. "A virtual AGM does not have to be limited to reading out prepared questions and answers. You could give your shareholders the opportunity to ask questions live - as a technology company, that shouldn't be too much of a challenge," commented well-known investor Christian Röhl at the time, under Östberg's justification. Respect for shareholders looks different, but perhaps Östberg will now learn that in the MDax, the second stock market league.