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How to Buy Deliveroo Shares UK – with 0% Commission

Deliveroo – the UK-based food delivery group, has announced plans to go public in April 2021. Based on current valuations, this will be the largest London Stock Exchange IPO since Royal Mail floated in 2013.

But, is Deliveroo a good investment? In this guide, not only do we show you How to Buy Deliveroo Shares in the UK but we also cover the ins and outs of whether this up-and-coming stock is worth adding to your portfolio.

Step 1: Find a UK Stock Broker to Buy Deliveroo Shares

DELIVEROO IPO

If you want to buy Deliveroo shares – you have a couple of options at your disposal.

You might be looking to invest during the IPO itself, albeit, this is typically reserved for institutional players. As such, your best bet is to use an online broker that will list Deliveroo shares as soon as they hit the secondary market.

With this in mind, below we discuss a selection of UK stock brokers and stock apps that will allow you to trade or buy Deliveroo shares the very minute they hit the London Stock Exchange.

1. eToro – Buy Deliveroo Shares with 0% Commission

etoro logoeToro is a hugely popular online stock broker that is regulated by the FCA and covered by the FSCS. With more than 20 million clients under its belt, this broker stands out for several key reasons. Firstly, eToro has a great track record when it comes to offering newly listed IPO shares. This was the case with the recent IPO listing of Airbnb – and many others before.

This means that you won’t miss out on favorable pricing, as you should be able to get in on the action very early. In terms of fees, this is where eToro really stands out. This is because the broker will allow you to buy Deliveroo shares without paying any dealing fees or commissions. Furthermore, eToro waivers the 0.5% stamp duty fee that you need to pay on London Stock Exchange equities – which will include Deliveroo.

etoro ipos

Another core benefit of investing in Deliveroo via eToro is that account minimums are very low. For example, the minimum deposit is just $200 – or about £140. The minimum investment per stock is just $50 – or about £35. As such, this will allow you to buy Deliveroo sharers without risking too much capital. If you are looking to invest in stocks other than just Deliveroo, eToro has you covered. This is because the broker offers more than 2,400 shares from 17 international stock exchanges.

In addition to this, you can also invest in the best ETFs – which includes Vanguard funds and iShares funds. You can also buy cryptocurrency and trade commodities, forex, and indices. These markets are also commission-free. In terms of getting started with an eToro account, the registration process takes minutes. You can easily deposit funds with your UK debit/credit card, bank account, and even an e-wallet like Paypal, Skrill, and Neteller.

Pros

  • 0% commission broker
  • No stamp duty tax on UK shares
  • Over 2,400 global shares and 250 ETFs
  • CFD markets also offered
  • Social network with copy trading
  • Regulated by the FCA
  • FSCS partnered

Cons

  • Withdrawal and inactivity fees

67% of retail investor accounts lose money when trading CFDs with this provider.

 

2. Capital.com – Trade Deliveroo Share CFDs With Leverage

new capital.com logoIf you’re an experienced trader that is looking to access the Deliveroo IPO in a more flexible way – CFD trading platform Capital.com is worth considering. Much like eToro, Capital.com doesn’t give you direct access to IPOs. But, the platform typically offers a market on IPO stocks as soon as they hit their respective exchange.

As this broker specializes in CFD instruments – this means that you can trade without needing to take ownership of the asset. Instead, you simply need to determine whether Deliveroo shares will rise or fall in value. As such, by trading stocks CFDs at Capital.com, you also have the option of short-selling Deliveroo shares if you think the firm is overvalued (like many market commentators do).

capital.com IPOs

All you need to do is create a sell order at the platform – and if Deliveroo stocks fall in value, you will make a profit. Another benefit of trading Deliveroo share CFDs is that you can apply leverage. UK retail traders have access to leverage of up to 1:5 on stocks, and more on any assets. This means that a £50 stake on Deliveroo stock CFDs would translate into a trade value of £250. In terms of fees, Capital.com is also a commission-free trading platform like eToro.

As such, it’s only the spread that you need to take into account when trading at this platform. What we also like about Capital.com is that it is suitable for newbies. For example, the minimum deposit is just £20 – so even if you have never traded CFDs before – this is an inconsequential amount to test the waters. Or, you might consider starting off with the Capital.com demo account. This allows you to trade without depositing or risking any money.

Pros:

  • Over 3,000 CFDs to trade
  • Tight spreads
  • 0% commission
  • Leverage and short-selling
  • Discovery panel helps spot high volatility stocks
  • Integrates with MetaTrader 4 and TradingView
  • Highly responsive 24/7 support

Cons:

  • Web Trader doesn’t support price alerts
  • No traditional ownership – CFDs only

75.26% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Research Deliveroo Shares

Make no mistake about – and like most IPOs in recent years, the markets are completely divided over whether or not Deliveroo represents a good investment. For example, while some believe that Deliveroo has many years of growth ahead of it, others argue that the firm is overvalued.

Taking this into account, it’s really important that you do your homework before you buy shares in Deliveroo To help clear the mist, the sections below cover core data and information relevant to the food delivery company.

Deliveroo IPO and Company Overview

Deliveroo is an online food delivery company that was founded in 2013. The main concept of the firm is pretty much the same as Just Eat and Uber Eats. That is to say, you can visit the Deliveroo website or mobile app, select a restaurant, add your chosen food and drink to your basket, and then Deliveroo will deliver the order to your home.

Naturally, Deliveroo makes a commission every time an order is placed via its platform – which is covered by the respective restaurant. Additionally, Deliveroo also offers the option of paying a monthly subscription fee to avail of any delivery charges. This ensures that the firm has two core revenue streams.

delivery shares buy In terms of its IPO, this has been scheduled for the first week of April. Deliveroo shares will be available to buy via its IPO at 410p each. This means that the firm will attract a market valuation of £8.8 billion. This is why many commentators stress that the firm is overvalued, especially when market leader Just Eat has a market capitalization of just under £10 billion.

Deliveroo EPS and P/E Ratio

At the time of writing, Deliveroo is yet to go public so we are unable to provide any information regarding its EPS or P/E ratios.

Deliveroo Shares Dividend Information

As a company that is still at the very start of its stock growth journey, Deliveroo is not likely to pay dividends any time soon. Instead, and like most growth stocks, the firm will reinvest its retained profits back into the company.

Should I Buy Deliveroo Shares?

So that begs the question – should you buy Deliveroo shares or are there much better investment opportunities elsewhere? To clear the mist, below we discuss several reasons why you might decide to invest in Deliveroo or perhaps – give it a wide berth.

Hottest IPO Since Royal Mail

Unlike markets in the US, the London Stock Exchange has been starved of major IPOs in recent years. This is why there is so much buzz around Deliveroo and its £8.8 billion market valuation. Crucially, this means that the Deliveroo IPO is the largest since Royal Mail.

Without even looking at the business fundamentals, there is every chance that FOMO (Fear of Missing Out) will lead the way. That is to say, waves of UK retail investors will potentially look to buy Deliveroo shares simply because they believe that the stocks will increase in the long run and thus – now is the best opportunity to invest at the cheapest price possible.

Online Food Delivery is Rapidly Growing Marketplace

The online food delivery space – especially in the case of mobile app-based ordering, is growing at an exponential rate. While growth was notable before the pandemic, this really accelerated when the UK first went on lockdown.

After all, while eat-in restaurants were forced to close for months on end – takeaway delivery services remained open. In fact, this resulted in traditional restaurants adapting their core business model by entering the home delivery sector.

delivery shares buy

And of course – firms like Deliveroo benefited from this greatly. This is why proponents of the Deliveroo IPO will argue that now is as good a time as any to float the company.

Pre-Sale is Oversubscribed

In an unusual move often taken by firms that are making the transition from public to PLC (e.g. Royal Mail, BT, etc.) – Deliveroo has reserved some of its shares to the retail investor marketplace. More specifically, existing customers of the home delivery platform were given the chance to register their interest in buying the shares directly from Deliveroo (via Primary Bid).

This permitted a maximum investment of £1,000 per individual. However, and is often the case with direct offerings, this segment of the Deliveroo IPO has been oversubscribed.

This means that more people have applied than there are shares available. Once again, this highlights that there is a lot of interest in this upcoming IPO and thus – there is every chance that the shares will see notable growth as soon as they hit the secondary market.

Overly Competitive Market 

On the one hand, it is true that that the online food delivery industry is growing at a rapid pace – especially since the pandemic came to fruition. However, the key problem is that this industry is very quickly becoming oversaturated. For example, in the UK market, you have the likes of Deliveroo, Uber Eats, Just Eat, and more.

Deliveroo is active in several international markets too – all of which also face stiff competition from multiple players. For example, Delivery Hero is a major player in Europe – with Deliveroo operating in Ireland, Belgium, Italy, the Netherlands, and more. With such a fragmented market now a reality, this presents a major red flag for Deliveroo IPO investors.

Deliveroo Won’t Join the FTSE 100

At a proposed market capitalization of almost £9 billion – this is more than enough for Deliveroo to slot straight onto the UK’s primary stock market index – this could be of interest if you were to look at how to invest in FTSE 100. However, due to legal complexities surrounding its dual-listing, Deliveroo isn’t eligible to join the FTSE 100 or even the FTSE 250.

This isn’t a major issue per se, but it does present a missed opportunity for the firm. This is because FTSE 100 stocks often get a boost when ETFs and mutual funds gain exposure to the index on behalf of their investors.

In other words, had Deliveroo joined the index – funds from all over the world that are tracking the FTSE 100 would need to buy a proportionate amount of Deliveroo shares. In turn, this would generate demand and thus – would have a positive impact on the firm’s stock price.

Step 3: Open an Account and Deposit Funds

If you have performed lots of research on Deliveroo and still wish to proceed with an investment – you only have one option at your disposal – wait for the shares to hit the secondary market. This is because it’s direct offering to Deliveroo customers is already oversubscribed – so you won’t get a look in.

With that said – we find that newly listed IPOs often hit the eToro website as soon as they hit the secondary market – so you won’t need to wait long to get in on the action. As such, your first port of call is to head over to the eToro website and open an account.

eToro sign up

67% of retail investor accounts lose money when trading CFDs with this provider.

This shouldn’t take you more than a few minutes and will simply require you to enter your personal information.

This includes:

  • Full name
  • Home address
  • Date of birth
  • National insurance number
  • Email address
  • UK mobile number
  • Username and password

As eToro is an FCA-regulated broker, you will also need to upload a couple of verification documents – which includes:

  • Passport or driver’s license
  • Recently-issued bank account statement or utility bill

You can actually skip this step as long as you are not planning to deposit more than $2,250 (about £1,600). This does need to be done before you make a withdrawal, though.

Although you do not need to make a deposit right now – the Deliveroo IPO is soon approaching. As such, to ensure you are able to buy Deliveroo shares as soon as they hit eToro – it might be worth making a deposit.

You can choose from the following UK payment methods:

  • Debit/credit cards
  • Paypal
  • Skrill
  • Neteller
  • Bank account transfer

Step 4: Buy Deliveroo Shares

Once you have opened an account and made a deposit – it’s then just a case of waiting for the IPO to conclude. As soon as the shares hit the London Stock Exchange – it shouldn’t be too long before eToro allows you to invest.

When the time does come around – all you need to do is search for ‘Deliveroo’ and click on the ‘Trade’ button. Then, you need to enter the amount you wish to invest and confirm the order by clicking on ‘Open Trade’.

Deliveroo Shares Buy or Sell?

Leading up to the biggest UK IPO since Royal Mail – opinion on Deliveroo is still split. On one side of the camp, some would argue that the firm is heavily overpriced – with a proposed IPO valuation of almost £9 billion.

This would mean that Deliveroo is valued at an amount that is not far behind Just Eat – which at the time of writing holds a market capitalization of just under £10 billion. On the flip side, some investors are keen on Deliveroo and its rapidly growing business model. This is especially the case with investors looking to add long-term growth stocks to their portfolio.

Ultimately, it’s wise to perform lots of independent research prior to investing in Deliveroo to ensure the stock meets your financial goals and attitude to risk.

The Verdict?

If you want to buy Deliveroo shares before its April 2021 IPO – you’re likely out of luck. This is because its offering to existing customers is already oversubscribed, so you won’t be able to invest.

With that said, eToro is likely to list Deliveroo shares as soon as they hit the secondary markets. Best of all, you won’t pay any commission when you buy Deliveroo shares at eToro – nor will you be charged any UK stamp duty!

eToro – Buy Deliveroo Shares With Zero Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

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About Kane Pepi PRO INVESTOR

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Academically, Kane holds a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and he is currently engaged in a Doctorate Degree researching the money laundering threats of the blockchain economy. Kane is also behind peer-reviewed publications - which includes an in-depth study into the relationship between money laundering and UK bookmakers. You will also find Kane’s material at websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.

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