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Woocommerce Category Post Widget
GrubHub’s terrible earnings and more than 40% stock plunge last week is not indicative of the potential of the broader food delivery business, Postmates co-founder and CEO Bastian Lehmann told CNBC on Thursday.
When asked if the catastrophe at rival GrubHub was just a GrubHub problem, Lehmann said, “100%,” adding it’s “the idea that bad management equals a bad market is a shoe that doesn’t fit the new breed of companies,” suggesting that Postmates is among them.
Lehmann told “Squawk Box” that it’s on the companies to adapt new strategies and distinguish themselves from one another as competitors, such as Uber Eats, DoorDash and Seamless, pack into the crowded food delivery industry.
“The right way to think about the space is not a winner take all market,” Lehmann said. “You will have different brands in the space that appeal to very different customer bases, based on the merchants that they provide access to.”
Taking a veiled swiped at GrubHub, Lehmann said, for example, that millennials who like Postmates may be turned off by delivery companies that cater to people over 50 years old.
After reporting worse-than-expected earnings and dismal guidance on Oct. 29, shares of GrubHub plunged more than 43% in a single day, prompting an avalanche of downgrades from Wall Street firms including Bank of America Merrill Lynch and Oppenheimer. As of Wednesday’s close, the stock recovered about 9% of that huge drop, but GrubHub has still lost more than half of its market value this year alone.
GrubHub did not immediately respond to CNBC’s request for comment on Lehmann’s remarks.
Postmates’ Lehmann spoke to CNBC during a quite period after it confidentially filed for an initial public offering back in February. The company had been expected to unveil its IPO prospectus in September.
“We had a window earlier in the year, but, you know, after somewhat lukewarm reception of tech companies, specifically after WeWork and their losses, I think we’re ready to go when we feel that the market conditions are right,” Lehmann said. “We have the time to figure out when we want to go out.”
Looking at the arch of the third-party food delivery business through GrubHub’s spectacular rise and fall on Wall Street, the stock went public in 2014 at $26 per share. It rose to all-time highs around $145 in August 2018. But it’s been on a rather steady decline since then, dropping about 75% as of Wednesday close of $36.14 per share.