AMZN - Just Eat Takeaway soars DoorDash slides after Amazon takes stake in Grubhub

Analysts weighed in on the news that Amazon ( AMZN ) is taking a stake in Just Eat Takeaway.com's ( OTCPK:TKAYF ) Grubhub.

Under the agreement, Amazon ( AMZN ) will acquire warrants that work out to a 2% stake in Grubhub and can acquire warrants representing an additional 13% stake if certain performance obligations pertaining to customer acquisitions are met.

Bank of America analyst Michael McGovern said that the offer should lead to elevated competition for DoorDash ( DASH ) with its DashPass subscription offering, which competes with Grubhub+ and could see headwinds to customer acquisition and retention.

"Ultimately, we expect the Amazon/Grubhub incentive program will have little impact on DoorDash’s near-term growth or margins, with DoorDash already at nearly 60% US market share (while Grubhub is at just 13%, per Second Measure), but we anticipate some overhang for the stock due to the long-term potential for Amazon to re-enter the food delivery industry."

BofA lowered its price objective on Buy-rated DASH to $85 following the development.

Jefferies analyst Giles Thorne thinks the Amazon-Grubhub partnership makes strategic sense. "Grubhub has secured not just a very powerful partner, but also a very efficient acquisition channel. For a hitherto stranded asset and dead-weight to the JET equity, this is positive news," he noted.

Just Eat Takeaway.com's ( OTCPK:TKAYF ) soared 19.55% in Amsterdam trading following the Grubhub news. Shares of DoorDash ( DASH ) fell 8.00% in premarket action in the U.S. Amazon ( AMZN ) peeled off 0.55% .

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