dicated online supermarket, Ocado, was rated Europe's best performing major stock in 2013. Ocado shares ended 2013 at 441.6 pence, a gain of 410% for the year and more than double the 180 pence at which they were sold in a 2010 initial public offering.
That made the online retailer the best performer in the Stoxx 600 Index, Europe’s benchmark indicator, ahead of Vestas Wind Systems and Thomas Cook Group Plc. It marks a spectacular turnaround as earlier on this year Ocado risked going out of business and was heavily shorted.
This was because the company suffered from a large debt load, had minuscule cash flow and declining growth prospects.
However, shares in Ocado, which has yet to make an annual profit, surged on optimism that the company will be able to strike more deals like its 25-year accord with Morrison, which potentially puts a higher value on its Web and logistics technology than the retail business. Under the deal, Ocado will help Morrison to make a belated entry into online grocery next month.
This agreement also gave rise to expectations for further deals with other grocers as well as speculation that Ocado might be acquired for its automated warehouse grocery picking technology by Amazon.
With help from a highly bullish note from Goldman Sachs, Ocado's lead IPO underwriter, a huge short squeeze took Ocado's shares up to where they are now.
