Stock Spotlight: Ocado avoids FTSE 100 relegation for now but questions remain

Worst FTSE 100 performer YTD

UK online grocer Ocado Group narrowly avoided relegation in last week’s FTSE 100 reshuffle but may yet fall from the blue chip index, as questions remain over its business model, experts told Investment Week.

Ocado first listed on the London Stock Exchange in July 2010 and had a troubled IPO process. The firm originally sought a market value in excess of £1bn with a float target of 200-275p per share. The day before the IPO was due, the target was revised to 180-200p, with the company eventually achieving only the lower price of its two targets, floating at 180p per share.  This gave the firm a market cap of £937m at launch, although some analysts argued it was worth considerably less, offering estimates of £500m.  The company is an amalgamation of different enterprises, the most well-know...