31–40 of 150 posts
Earlier quoted context omitted.
Mergers and acquisitions rarely work out for the entities as such. To understand why they nonetheless continue to happen so often it’s necessary to peer beyond the corporate veil and look at the incentives of the individual players.
> Mergers and acquisitions rarely work out Instagram DoubleClick NeXT Here are some businesses off the top of my head that are thriving because of their acquisitions.
I bet GrubHub realizes it can get an even bigger payday later on when either Uber or DoodDash will need to acquire it. That's probably why they didn't want to consolidate with Uber immediately.
Earlier quoted context omitted.
Mergers and acquisitions rarely work out for the entities as such. To understand why they nonetheless continue to happen so often it’s necessary to peer beyond the corporate veil and look at the incentives of the individual players.
> Mergers and acquisitions rarely work out Instagram DoubleClick NeXT Here are some businesses off the top of my head that are thriving because of their acquisitions.
Earlier quoted context omitted.
1 example: they could take on debt from a Bank to make the purchase for example. "Just Eat Takeaway was created this year through the $7.8 billion combination of two of the earliest participants in Europe’s food-delivery market, Just Eat and Takeaway.com. It has been fighting competition in Europe from Uber Eats and Deliveroo, a London-based company whose investors include Amazon. Mr. Groen, a Dutch entrepreneur, fou…
I don't get it. Why would a bank loan billions to a company losing money, so they can acquire another company losing money? The bank takes all the risk for little return. At what point should the bank just become an investor.
Although this may not be a LBO situation, selling junk bonds is often the way that PE firms steal everything from firms they "buy". I have no idea how the "all-stock" claims jive with selling bonds. I suppose the buyer could just issue more of its own stock, if the numbers don't add up. [EDIT:] This last maneuver seems more plausible if the buyer itself was previously a LBO target and the PE dudes haven't totally drained it yet.
In SF at least Grubhub tends to have some of the more "typical delivery" choices (pizza, chinese food, thai) and decent customer service, Doordash seems to have the most variety but the dashers take their merry time on their way to you (and customer service is nonexistent), Uber Eats is somewhere in between grubhub and doordash in selection and has nonexistent customer service (but at least give you a refund if something goes wrong), caviar has a smaller selection but a lot of unique/higher end things (along with a terrible app but OK customer service), and Tock is targeting the "high end at home" market. There's also postmates which seems more expensive than the others for the same exact restaurants (but seems to have more traction in LA).
At the end of the day, the search is really bad (clicking the healthy category includes deep dish pizza and fried chicken on almost all the apps), the drivers aren't adequately compensated so the customer experience is bad (your driver might make 4 stops on the way to you and your food will be cold), and the apps are slow and buggy.
I'm convinced that significant improvements in search, recommendations, adding proper review support, and finding a way to not piss of restaurants in the process will determine the winner in this battle. The differences in selection are too small (in SF caviar which is owned by doordash and tock being the exceptions) to really crown a winner on that front.
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Have you tried pizza pie? But really, the economics are all in operations and scale. Some people may complain that they can’t get delivery 10 miles away from a restaurant.. but they aren’t willing to tip or pay higher for the back and forth a driver must do to earn more than it costs to pay them. Cutting to 5 or even 3 miles for delivery ranges makes a big difference for orders per hour.
The economics are that when you insert a multinational between a local restaurant and a local hungry person, revenue to the restaurant drops, prices paid by the customer rise, and service gets worse. This is why after a couple orders right at the start of lockdown, I started calling restaurants directly. Some of them are delivering in breach of their contracts on the side, the rest I just walk over and pick up.
Exactly, when the Softbank or VC money runs out for Doordash and the like it will be total mutiny, I doubt most if any drivers, outside of the Top dasher that accepts any orders, will continue to do so when the pay rates are reflecting the true costs of all externatalities are included in the total calculus. Several drivers see their 0% acceptance rate as a badge of honor, as its their only real avenue for opposition against the low delivery pay orders.
I was interested in the logistic sides of food delivery systems, especially during the shutdown, so I started to spend an hour a day of research on DD on their subreddits, and over time that led to even doing a few dashes myself during this period... and suffice it to say, everything from their app, to customer/dasher support, to the pay model are not sustainable so long as Humans are involved in the equation.
I've spoken to local restaurant owners and cooks during the shutdown in person, having experience in the Industry, and most were reluctantly using it as crutch in difficult times but it was cutting into their over all margins, which already suck.
Now with things starting to re-open in many states I hope they start to de-couple it to be less than the 10% of their total sales for their sake.
It looks like Just Eat currently has a market cap of 5.233B pounds, 6.645B USD. How does an all stock acquisition of 7.3B USD work in this case? Is this done via issuing more than an extra 100% of stock on the expectation the new asset will counteract the dilution to keep the stock price similar?
1 example: they could take on debt from a Bank to make the purchase for example. "Just Eat Takeaway was created this year through the $7.8 billion combination of two of the earliest participants in Europe’s food-delivery market, Just Eat and Takeaway.com. It has been fighting competition in Europe from Uber Eats and Deliveroo, a London-based company whose investors include Amazon. Mr. Groen, a Dutch entrepreneur, fou…
How is taking on debt, relevant to an all-stock deal? An all-stock deal means that Grubhub shareholders aren't receiving any cash, they are receiving $7.3B worth of JustEatTakeaway stock.
The only interpretation I can think of, is what the previous poster said - the existing shareholders of JET are getting significantly diluted
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The economics of food delivery can’t be solved with efficiency. There’s not enough pie to split.
Have you tried pizza pie? But really, the economics are all in operations and scale. Some people may complain that they can’t get delivery 10 miles away from a restaurant.. but they aren’t willing to tip or pay higher for the back and forth a driver must do to earn more than it costs to pay them. Cutting to 5 or even 3 miles for delivery ranges makes a big difference for orders per hour.
> Have you tried pizza pie?
IIRC, proper pizza delivery requires a special warming bag. These generic delivery companies that employ gig-working randos don't equip their drivers with those bags, so they suck at delivering pizza at any distance, greater "efficiency" or no.
Earlier quoted context omitted.
> Mergers and acquisitions rarely work out Instagram DoubleClick NeXT Here are some businesses off the top of my head that are thriving because of their acquisitions.
The key word being rarely
Earlier quoted context omitted.
The economics are that when you insert a multinational between a local restaurant and a local hungry person, revenue to the restaurant drops, prices paid by the customer rise, and service gets worse. This is why after a couple orders right at the start of lockdown, I started calling restaurants directly. Some of them are delivering in breach of their contracts on the side, the rest I just walk over and pick up.
> The economics are that when you insert a multinational between a local restaurant and a local hungry person, revenue to the restaurant drops, prices paid by the customer rise, and service gets worse. Exactly, when the Softbank or VC money runs out for Doordash and the like it will be total mutiny, I doubt most if any drivers, outside of the Top dasher that accepts any orders, will continue to do so when the pay rat…