Shares of Just Eat Takeaway.com (NASDAQ:GRUB) were tumbling 9.6% in afternoon trading Thursday after the third-party food delivery giant provided a generally upbeat business update, but also noted it may be booted from FTSE indexes when the London Stock Exchange (LSE) organization does its semi-annual review in September.
Just Eat Takeaway says it has completed its merger with Grubhub to create one of the world's largest food delivery companies. It noted combined global orders grew 37% in the second quarter, 47% coming from outside the U.S. and 14% in the U.S.
Over the first half of 2021, combined orders were up 51%, and though it's reporting unspecified adjusted EBITDA losses for the period, it believes they have peaked. They were caused by caps on fees delivery companies in the U.S. could charge, and management now believes adjusted EBITDA margins will improve going forward.
Just Eat Takeaway said the FTSE Russell investment management division of the LSE is expected to make a determination on the nationality of stock listings for inclusion in indexes. Just Eat Takeaway is headquartered in Amsterdam while Grubhub is in Chicago. Depending on which country FTSE decides it belongs to could result in the loss of index inclusion.
Removal from an index means institutional investors would have to sell the food delivery stock to conform to the index makeup.