Amazon takes part in the struggling food delivery Grubhub | News

US online retailer Amazon is expanding its food delivery business with a minority stake in troubled food delivery company Grubhub. Amazon initially has a two percent stake. The transaction includes an option to increase the stake by an additional 13%.

They should both benefit from participating in the company. This is to benefit Amazon customers and grow the Grubhub business: Amazon Prime members in the US can sign up for free Grubhub membership for one year and receive free restaurant meals with an order value in excess of $ 12. This will strengthen the business, says Grubhub CEO Adam DeWitt. If this trade brings enough customers, Amazon could increase its share of the US food delivery service.

While Amazon knows the business and has a stake in UK Deliveroo, and also supplies groceries from Amazon Fresh itself, Grubhub is under fierce competition in the US from DoorDash and Uber Eats. Like most of its competitors, Grubhub is loss-making. Last year, the pre-tax minus was € 403m.

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Just Eat Takeaway.com boss Jitse Groen is considering various strategic options at Grubhub, including selling a company that was acquired just a year ago for $ 5.8 billion. The trial is ongoing, he said. The outcome of the efforts is unclear. After the peak of the corona crisis, customers around the world are paying more attention to their money due to inflation and the economic downturn, and therefore also saving when shopping. This reduces the interest in food delivery services.

Amazon’s actions begin a counter-movement

Amazon stock lost a significant 30 percent this year and hit a new annual low of around $ 100 in June. However, stocks have recovered significantly since then, backed by the rising MACD (Momentum). Next resistance is $ 118 and just under $ 130. Only after overcoming these two obstacles does the chart improve in the long run.

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