Ocado shares slid after appealing to investors for £578m funding – offering shares at a steep discount.

The grocer-turned-tech platform, which sells automated warehouses to supermarkets, said the fundraising would accelerate its expansion plans.

After seeing the pandemic accelerate the adoption of online shopping, Ocado believes it needs to roll out its high-tech “customer fulfillment centers” even faster.

Roboshoppers: Grocer-turned-tech platform Ocado, which sells automated warehouses to supermarkets, has appealed to investors for £578m funding

Warehouses are run by robots that pick, pack and ship grocery orders.

City analysts were divided on the merits of the move. Bernstein’s William Woods said that despite the “short-term pain”, fundraising would be positive in the long run.

But advising investors to “run”, Shore Capital’s Clive Black disagreed: “We don’t see this as fundraising to generate growth from a position of strength, as opposed to a cash-burning business that needs access to more equity and liquidity. Resources.’

Russ Mould, Chief Investment Officer at AJ Bell, added: “Ocado remains a jam story for tomorrow… at some point it will have to start turning a profit and making money soon, because that’s until now the missing component of his story.”

Ocado raised money by selling shares at 795p each, a 9% discount from their closing price on Monday evening. The shares yesterday fell 2.5%, or 22p, to 855.6p.

The stock has fallen 50% this year and 70% since its Covid peak. In the opposite direction of the FTSE 100, packaging company DS Smith posted higher profits despite “significant cost increases”.

The company – which has benefited from the delivery boom during the pandemic and counts Amazon and Tesco among its biggest customers – saw a 71% rise in profit to £378m in the 12 months to April.

Stock Watch – Hurricane Energy

Oil and gas company Hurricane Energy jumped 30.4%, or 1.8p, to 7.5p as rumors swirled that a mystery suitor was preparing to make a bid.

A city source told the Mail that a potential buyer was running the business.

In online forums, shareholders hoped an offer could be made for up to 20 pence a share.

The hurricane, which searches for oil and gas in the North Sea, was on the verge of collapse after production problems, but rising oil prices helped it escape the worst of its problems.

Revenue jumped 26% to £7.2bn. The shares rose 3.7%, or 11.5p, to 292.8p. The FTSE 100 gained 0.4%, or 30.24 points, to 7152.05 as the bullish start to the week continued.

The index was supported by a rise in oil prices above $115 a barrel which lifted BP up 1%, or 3.9p, to 395.35p and Shell up 1.9%, or 40, 5p, at 2151p.

Firming commodity prices also helped heavy miners with Antofagasta up 3%, or 38.5p, at 1329.5p while Rio Tinto gained 2.4%, or 125p, at 5250p.

Analysts have warned that gains on the Footsie could be short-lived, however, official figures are expected to show inflation today of around 9%.

David Madden, market analyst at Equiti Capital, said the gains amounted to a “relief rally” with recession fears lingering.

And the FTSE 250 fell 0.3%, or 61.77 points, to 18949.05.

As Britain’s biggest rail strike in 30 years kicked off, First Group shares fell 2.7%, or 3.6p, to 132.4p, while Go-Ahead fell 0.7%, or 12p, at 1600p.

Rolls-Royce shares fell 0.7%, or 0.67p, to 90.83p despite the firm’s announcement yesterday that it would give 14,000 UK workers a one-time payment of £2,000 to help to deal with the cost of living crisis.

The lump sum cash will go to 11,000 field staff and 3,000 junior managers.

It was another day of turmoil for airlines and other travel stocks as chaos continued to plague the industry.

British Airways owner IAG fell 1%, or 1.24p, to 119.3p, while mid-cap rivals easyJet (down 6.3%, or 28p, to 415.7p) and Wizz Air (down 4.1%, or 86p, at 2023p) were also on the slide. Holiday company Tui fell 4%, or 6.65p, to 158.45p.

The sale came as easyJet, which cut thousands of additional summer flights on Monday, had its price target slashed by UBS and Bank of America.

Elsewhere, shares of Telecom Plus rose 3.2%, or 56p, to 1,824p after posting an 8.5% rise in annual profits to £47.2m.

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