Acquisitions Wolt’s value has fallen by billions of dollars in a short period of time, drastically shrinking the rewards of Wolt’s executives

Two-thirds of the value of Doordash, which bought Wolt, has melted in half a year and the value of stock options has dwindled. Now, Wolt’s team is getting 500 million more incentives.

Food delivery company Doordash, a U.S. food courier that bought Wolt last November, has received permission from its owners to buy its own shares worth up to $ 400 million.

The information emerged from the information provided to the authorities.

According to Doordash, the purchase of the shares is intended to mitigate the consequences of the fall in the company’s share price for the employees in the company’s incentive scheme.

In other words, more shares purchased by the company or options attached to them are given to employees so that the incentives are still adequate.

When Doordash agreed to buy Wolt in November 2021, the transaction was carried out as a share exchange so that Wolt’s owners exchanged their Wolt shares for Doordash shares.

At that time, the Doordash share was traded for $ 206. Wolt was worth seven billion euros at the time, or $ 8.1 billion.

The Wolt deal and the good outlook for Doordash inspired investors so that Doordash’s share price rose another 25 percent from the trade announcement in November, to a high of $ 257.25.

At that time, Wolt was already worth more than ten billion dollars.

Read more: What makes Wolt, who has made a massive loss, so incomprehensibly valuable?

Wolt’s founders and employees participating in the incentive program looked pleased when the value of their stock or stock options rose.

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HS fell on November 11, that the value of Wolt’s founding six shares was approximately $ 600 million. A couple of weeks later, when Doordash’s stock was at its peak, that founding shareholder share had risen to 750 million euros.

Similarly, for example, an employee’s four-million-option stock option in the incentive program was already worth five million euros a couple of weeks after the transaction.

Belief in a technological revolution and a lasting change in eating habits was strong. Illustratively, the Nasdaq index, which tracks technology companies, was at an all-time high at the time.

Then the difficulties began.

Rising interest rates, inflation, production bottlenecks, the war in Ukraine and China’s interest rate hikes pushed stock markets down.

Read more: “The fears are now on the roof and all the alarm bells are ringing.” More and more warning signs are constantly appearing about the recession.

The prices of growth companies, which have made massive losses in particular, have plummeted.

Typically, the farther down the company’s future return expectations, the sharper the prices fell.

Read more: The growth bubble burst. “It will take a moment for everyone to understand the new reality.”

This on Monday of the week, Doordash’s closing price was only $ 67.81. Two-thirds of the company’s value had melted away from the moment the deal for Doordash’s Wolt deal was announced.

At Doordash’s stock market value on Monday, Wolt was no longer worth $ 8.1 billion but $ 2.7 billion, or more than $ 2.5 billion.

For example, the CEO Miki Kuusen At the time of the transaction, the pot of approximately EUR 300 million has melted to just over one hundred million, the founding partner Juhani Mykkänen A pot of 44 million euros to about 15 million, and so on.

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Wolt’s valuation had dwindled to $ 5.4 billion in six months.

The only consolation was that after the war in Ukraine, the dollar had strengthened against the euro.

Others too platform transport and courier companies have been ringing.

The price changes from last year’s highs to this day are illuminating: the price of food courier and taxi company Uber has fallen from $ 52 to $ 24 and its challenger Lyft’s share has fallen from $ 63 to $ 20.

In Europe, the prices of food delivery companies have behaved the same. The German Delivery Hero has fallen from a peak of € 135 to the current € 28 and the British Delivero from £ 397 to £ 85.

Doordashin The Wolt deal is still pending and under investigation by the authorities. According to the agreement, the deal should be completed by the end of June.

The terms of the transaction have not been disclosed except as fully executed as a share exchange.

On the other hand, it was not told what kind of sales restrictions were involved lock upeja The agreement stipulates for Wolt’s shareholders before they can dispose of their shares.

Typically, such “locks” are valid for at least a year. This is to prevent the sale of too many shares from collapsing.

In addition to this, incentives have often been built for the employees of the company to be acquired to ensure that it is not worthwhile for them to change jobs in the next few years, as otherwise a large part of the incentives will not be received.

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Doordash has set aside as much as $ 500 million in such new stock incentives for the Wolt team alone. The information comes from Doordash and Wolt’s November 9 merger announcement.

Of the $ 400 million share purchase license released last Thursday, it is likely that some of these additional incentives will be targeted at Wolt.

Doordash listed on Wall Street in December 2020. The company’s board and management have since sold shares of Doordash for billions of dollars.

Sales have continued this spring. According to Dataroma statistics over the past six months, Doordash insiders have sold shares for $ 178 million. Some of these are pre-agreed sales programs that automatically go on sale.

Helsinki According to reports, Wolt had an alternative to the Doordash deal in November if the company had taken more risk money from the market and continued to operate as an independent company.

Was the share exchange with Doordash a good or a bad solution?

A comparison with the valuations of international competitors shows that, in any case, Wolt’s value would have fallen in the same proportion as in the entire industry.

Now Wolt’s value is fluctuating according to American valuations, otherwise spending could be even colder.

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