GrubHub: Too Many Big Fish


In case you have been living under a rock for the past few days, you have probably heard that Amazon (NASDAQ:AMZN) plans to acquire Whole Foods Market (NASDAQ:WFM) in a deal worth $13.7 billion. The Amazon acquisition of Whole Foods makes a lot of sense. Amazon has completely changed the world of retail. It has put a stranglehold on the brick and mortar and mall based retailers such as Macy’s (NYSE:M) and Sear’s (NASDAQ:SHLD), and evolved retail into a “stay at home” activity. Now many think Amazon may be on its way towards changing the way we buy and order food.

The “stay at home” economy is here, and like it or not this trend is only going to continue. Amazon, Netflix (NASDAQ:NFLX), and Domino’s Pizza (NYSE:DPZ) were some of the first companies to recognize and benefit from this trend. These companies all positioned their businesses to reach customers from the comfort of their home.

Now another player, emerging from the “stay at home” economy has entered the conversation as a potential takeover target for Amazon; this company is GrubHub (NYSE:GRUB). Is this just speculation at this point and is it worth buying shares of GrubHub on this news?

GrubHub is a mobile app based platform that provides an online takeout food platform for consumers to order from diners and restaurants. GrubHub is a middle-man, the firm generates revenue by charging restaurants a commission based on each order amount and by charging consumers a delivery fee.


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