GrubHub Drops as Insiders Plan to Sell Stock After IPO

GrubHub Inc. (GRUB), an online and mobile food-ordering service, fell after filing to sell 10 million shares in a secondary offering, giving insiders an early chance to unload their stakes after an April initial public offering.

The shares declined 8.4 percent to $39.16 at the close in New York, the steepest drop since April 10. GrubHub stock has gained 51 percent since the Chicago-based company first sold shares to the public at $26 each on April 3.

GrubHub plans to sell 1.25 million shares in the offering, according to a filing today with the U.S. Securities and Exchange Commission. The remaining 8.78 million shares will be sold by insiders, including members of the company’s board and management, who otherwise wouldn’t be allowed to sell shares yet because of a lockup period that typically restricts early investors after an IPO. The underwriters for the IPO have agreed to waive the lockup rules, GrubHub said.

GrubHub has been quickly expanding its empire of online food ordering and delivery, and last year acquired rival Seamless.com. The company now has 30,000 restaurants in its network.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward, Reed Stevenson

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.