The Deliveroo share price popped on Thursday after the company secured a major win in a London court. The shares rose by almost 10% and ended the day at 275p, which is about 22% above its lowest level on record.
Deliveroo news. Deliveroo is a food delivery startup that launched one of the worst initial public offering (IPO) in London this year. Its stock has struggled since it went public after institutional investors avoided it because of its share structure and business risks. Now, one of those risks they feared seems to be ending.
On Thursday, the company won a major court case after a judge said that the firm’s riders were not employees. The Independent Workers of Great Britain (IWGB) in London brought the case as they wanted the drivers to unionize.
As such, it means that the company will not need to increase costs hiring the riders. The ruling comes a few months after the UK Supreme court said that Uber drivers were employees. In this ruling, the court said that the difference was that Deliveroo riders are able to offer their work to others with almost no penalty. Uber drivers, on the other hand, are required to offer the services themselves. So, what next for the Deliveroo stock price?
Deliveroo share price forecast
The hourly chart shows that the Deliveroo shares made a major bullish breakout on Thursday after the court ruling. Before that, the shares were struggling to move above the important resistance at 261p. The stock is now above the 25-day and 50-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has spiked to 75.
Therefore, in my view, the court ruling is a catalyst that will likely attract new retail and institutional investors. This could see the shares jump to the next key level at 300p. On the flip side, a move below the support at 250p will invalidate this trend.
Don’t miss a beat! Follow us on Telegram and Twitter.
ROO stock chart
Follow Crispus on Twitter.