GrubHub's more than 40% slide Tuesday should remind investors of an important lesson: If anybody can knock off a business idea, there's a good chance somebody will.
Five Wall Street analysts downgraded the stock, noting vastly increased competition in the food delivery business. Investors buying in at the top should have asked this crucial question: How hard is it to start a food delivery service?
Beyond Meat was another big loser Tuesday, down more than 20%. A lockup period expired and now company insiders can sell for the first time since their spectacular initial public stock offering. A sell-off was to be expected. The company's success, after all, is based on a recipe and recipes can be copied.
WeWork, which recently dashed plans for an IPO, has the same issue. It's mostly just a marketing fete to lease office space and break it up into coworking units. The barriers to entry are just not high enough to keep competitors at bay.
