From student in an attic room to self-made billionaire with a villa by the sea. The story of entrepreneur Jitse Groen was nothing less than a boys’ book for years. But since the CEO of ordering platform Just Eat Takeaway (JET) continued his international acquisition path in June 2021 with the incorporation of American industry peer Grubhub (worth 6.4 billion euros), he gradually lost the confidence of many investors.
The parent company of Thuisbezorgd.nl is not doing very well on the stock exchange, especially this year. Since the beginning of 2022, the share has fallen below 30 euros. A year earlier, the share price was almost 70 percent higher. And that is not all due to the reopening of the catering industry and the increased interest rates to which tech stocks are traditionally sensitive.
And this while the shareholders have been satisfied for years with the organic growth of the company, which was founded in 2000, says Jim Tehupuring, founder of investment firm 1Asset Management. “JET is really a growth company and has been able to live up to that for years. Turnover has increased and customers are now ordering more often and for higher prices.”
But that satisfaction no longer applies to the acquisition strategy. Tehupuring: “They have previously made expensive acquisitions in Germany and Israel, and eventually merged with the British Just Eat in 2020. That all went pretty well. But Groen now seems to be taking it easy on Grubhub’s.”
This has everything to do with the poor performance in the erratic American meal delivery market. According to data agency Second Measure, Grubhub has been surpassed in terms of market share by competitors DoorDash and Uber Eats. That’s not a good sign. After all, according to CEO Groen, his company operates in a tough environment winner takes allmarket, in which a substantial market share is crucial in order not to lose out or be taken over.
“JET has become a hyper-nervous stock,” says stock analyst Nico Inberg of DeAandeelhouder.nl. “The underlying growth is actually going really well. The operations in the Netherlands, Germany, Canada and Australia are running smoothly. But shareholders fear that all the value and growth that has been created will be wasted by investing in America.”
One of those shareholders, the American Cat Rock, also complained about a “lack of communication” about the strategy of Just Eat Takeaway and tried – in vain – to force the split of Grubhub.
Groen ignored that and is now tapping into a new market with grocery delivery. Although that went reluctantly: the CEO saw nothing in it for years because of the limited profit margins on grocery delivery in his view. Last week, JET announced collaborations with supermarket chains Albert Heijn and Spar. Tehupuring: „That is something that investors do not like: first being firm and not wanting to do something, and doing it anyway. It feels like a one man show by Jitse Groen.”
According to Tehupuring, the fact that the JET CEO has changed his mind is partly due to the advance of flash delivery companies such as Gorillas and Getir. The analyst himself sees little benefit for JET in grocery delivery because of the high costs. In the stock market, last week’s announcements did not lead to a turnaround.
Groen therefore has quite a bit to explain at the shareholders’ meeting on 4 May. Inberg: “The expectation is that something will happen there. Green is under considerable pressure.”
On Wednesday, JET will release an interim trading report.
A version of this article also appeared in NRC in the morning of April 19, 2022