The course of action Just-Eat Takeaway has plunged! Here is what I would do about the action FTSE 100 now

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There are just a few days, the FTSE 100 supplier of food delivery Just eat take away (LSE: JET) has reached impressive heights. But the increase in the price of the stock JET at 90 euros was short-lived. In the space of a few days, it has fallen more than 18%. It is now at levels last seen during the stock market crash, triggered by the redemption by the JET of the american society Grubhub.It is not uncommon for the share price of the company’s acquisition falls on such advertisements. The reverse is true for the acquired business. The course of action Just-Eat Takeaway and trends of the course of action GrubHub are proof of that. However, the purchase of $ 7.3 billion does not need to be a negative in the long term for the price of the stock JET. It is true that an acquisition always carries the risk of integration challenges. The history of business is littered with examples of offers with good intentions gone awry. This risk is particularly high for JET, which has itself been recently formed by the merger of Just-Eat and the Dutch Takeaway.com.

Consolidation in the delivery industry food

But it is also true that this is the time of the consolidation in the delivery industry food. The industry is still young. Takeaway.com was formed there has only been two decades, for example. These services are more blooms in the years that followed. The acquisition of market share has therefore become a key means of ensuring the stability of income and ensure future growth in a consumer market that is otherwise fickle. The fact that GrubHub has failed to be acquired by Uber, shows the severity of the competition between the top players in the industry now.

A lot of potential in the long term

In addition to the expansion of the size, JET now has access to major u.s. markets in growth through GrubHub, where he had not worked up to now. I liked the long-term potential for the share price of JET because of his activity in any case. The latest acquisition has only added to its appeal for me. The online marketplaces are changing the face of business, and people like JET are the head of changes in the industry of food delivery. As consumers, many of us have first-hand experience of the convenience that programs like JET and its rival Deliveroo Offered. I am sure that if we were sceptical earlier, the restrictions imposed by the locks have transformed at least some of us converted to be convinced.

Verdict for the price of the share Just-Eat Takeaway

All of that is great. But its finances cannot be ignored. JET is a loss-making venture, which is not surprising either. This is the price to gain market share in a competitive market. The ratio of debt-to-equity ratio of the company has also increased Financial Times Data. I’d keep an eye on this ratio if the JET continues to feed its appetite for acquisitions.

Just as I like to invest in for-profit companies, JET is an exception because of the nature of the industry. It seems to be on the right track, which gives me confidence. It is gaining market share, increasing its chances of success. I think it would be useful to buy at the current share price, JET, when he is still subject.

Manika Premsingh has no position in any shares mentioned. The Motley Fool UK has no position in any shares mentioned. The views expressed on the companies mentioned in this article are those of the author and may differ from official recommendations that we make in our subscription services, such as Share Advisor, the Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of ideas makes us better investors.



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