Is Just Eat Takeaway Choking on Grubhub?

Shares of multinational food delivery business Just Eat Takeaway (NASDAQ: GRUB) have continued to slide in the days since the company delivered a lackluster forecast in its Oct. 21 investor presentation. Now a big investor in the Netherlands-based company is openly urging it to divest itself of Grubhub -- but Just Eat refuses to cut its U.S. subsidiary loose.

Is the delivery company making the right choice to keep Grubhub? There are strong arguments on both sides, but keeping the subsidiary may be the best strategy.

A week ago, investors responded negatively to management's Capital Markets Day presentation. Just Eat didn't boost its 2021 guidance and said it expected its earnings before interest, taxes, depreciation, and amortization (EBITDA) margins to shrink by 1% to 1.5% for the year. On the plus side, management said order growth should reach 45% year over year -- not counting Grubhub, which it acquired in June 2020 for $7.3 billion in stock, and fully integrated into its operations in June 2021. Management also asserted that this will be the company's "peak year of losses" and guided for a stronger 2022 performance.

Source Fool.com