Delivery Hero Certificate with 8% Chance and 36% Discount – Columns

Delivery Hero Certificate with 8% chance and 36% discount

Although the Delivery Hero share (ISIN: DE000A2E4K43) has fallen significantly since its all-time high of EUR 145.40 on January 5, 2021, it leads the DAX’s performance list by a large margin, doubling its share price over the past 12 months. After the sharp rise in the price of the past few weeks – on December 9, 2020, the share was still listed below 100 euros – the current correction in the share price, which was mainly caused by the capital increase of 1.2 billion euros, appears to be quite understandable.

In the latest analysis, Berenberg Bank recommended buying the food supplier’s share, which is classified as highly overvalued, with a price target of 160 euros. Investors who see the current price decline as a breather on the way to new heights could use the discounted price level to get into the share.

The investment idea: Anyone who generally believes the Delivery Hero share will have a positive price development, but would like to reduce the undoubted price risk of buying shares directly after the sharp rise in price last year, could consider investing in discount certificates on Delivery Hero shares grasp. Because of the cheaper entry into the share, discount certificates significantly reduce the risk of buying shares directly. On the other hand, the return potential of a discount certificate, in contrast to the unlimited profit potential of the equity investment, is limited.

How it works: If the Delivery Hero share is listed on or above the cap on the valuation day of the certificate, which defines the highest payout amount for the certificate, then the discount certificate will be repaid with its maximum amount of 90 euros.

The key data: The Morgan Stanley Discount Certificate (ISIN: DE000MA4KA69) on the Delivery Hero share has a cap of 90 euros. The valuation date is September 17, 2021; the certificate will be redeemed on September 24, 2021. At the Delivery Hero share price of 129 euros, investors could buy the certificate for 83.10 euros. The certificate is therefore 35.58 percent cheaper than getting the share.

The chances: Since investors can currently purchase the certificate for 83.10 euros, it enables a gross return of 8.30 percent (= 12.56 percent per year) over the next nine months if the share price on the valuation day is above the cap of 90 Quoted in euros. Therefore, the share price can even allow itself a price decline of 30.23 percent before the maximum return on this certificate is in danger.

The risks: If the Delivery Hero share is listed below the cap of EUR 90 on the valuation day, the certificate will be repaid at the closing price of the share determined on the valuation day. If the share is quoted below the purchase price of the certificate on that day, i.e. below 83.10 euros, the certificate investment will cause a loss – before expenses.

This article does not constitute a recommendation to buy or sell Delivery Hero shares or investment products on Delivery Hero shares. No liability is assumed for the accuracy of the data.


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