Geoffrey Smith 

Investing.com — Just Eat Takeaway stock (AS:), rose Wednesday morning in Europe after Grubhub announced it would be selling the U.S. delivery company that it purchased less than one year ago for $7 billion.

Just Eat stock had risen 2.1% to London by 4:45 am ET (8:45 GMT) but has fallen more than 50% since the beginning of the year due to higher interest rate expectations.

As it released its third quarter earnings, the company stated, “Management is currently exploring the introduction and/or partial or complete sale of Grubhub” with its advisers. However, it stated that there is no guarantee that such strategic steps will be taken or that they will occur at the right time.

Just Eat is experiencing a loss of more than $1 billion per quarter, as it continues to invest heavily in U.S. expansion. This comes in spite of fierce competition from Deliveroo (NYSE) and Uber’s Uber Eats. In each subsequent quarter, net losses increased from 59m euros in quarter one to 657m in quarter four.  

The first quarter 2022 will not see much improvement. According to the company, total orders decreased by 1% from year-earlier levels. This is despite a quarter where all its major markets saw extraordinary demand because of Covid-19 lockdowns. These factors remain largely unchanged since then. The nominal increase in gross transaction values was 4%, and the adjusted adjustment for depreciation of the euro made it flat year-over-year. This is because inflation was at between 7.5% and 8.5% in its main market in the first quarter. 

Just Eat stated in its press release: “Management regards enhancing profitability among its top priorities in 2022 with a clear emphasis on (i] increasing revenue per order (ii) improving delivery costs per order and (iii] reducing overheads as well as operating expenses.

But shareholders will not see the profits of the company for at least a year. Just Eat stated that it does not expect to become profitable at the current level of adjusted earnings prior to interest, taxes and depreciation through 2023.