Shares of Grubhub (GRUB) - Get Report slumped on Friday after the online food-delivery company denied it was for sale, contradicting reports this week that it was considering “strategic options” - corporate-speak for a sale or acquisition.
Shares of the Chicago-based company fell more than 7% to $51.53 in morning trading on Friday, reversing double-digit gains made earlier in the week, after it emphatically confirmed that there was no sale process underway.
“We felt it was important to clarify that there is unequivocally no process in place to sell the company and there are currently no plans to do so,” the company said in a statement.
Citing unnamed sources, The Wall Street Journal earlier this week reported that Grubhub had enlisted financial advisers to explore various strategic options, including a sale. The Journal also said the company was exploring contingency plans in the event an activist investor preys on it.
“We have always consulted advisers about a broad range of issues, including potential acquisition opportunities - that has not changed,” Grubhub said.
Grubhub, which went public in 2014, saw its shares soar 156% from January 2016 to August 2018.
The real challenge for all food-delivery companies are margins and, in turn, profits.
Travis Kalanick, Uber's co-founder and former CEO, last month sold $2.5 billion of Uber stock, prompting speculation that he was using the cash for CloudKitchens, his next venture focused on generic kitchens that restaurants rent capacity in to create food for delivery.