The golden times haven't been long gone for Niklas Östberg. The Covid-19 pandemic propelled Delivery Hero's stock price to three-digit heights. In August 2020, the Berlin-based delivery service, just over nine years after its founding, even made it into the German stock market index Dax, but had to leave it after two years. And Östberg ascended to the top earnings league: in 2020, he received 45.7 million euros thanks to generous stock options.

Since then, the world has fundamentally changed for the 1980-born CEO and co-founder. The Covid boom is over, as is investors' willingness to generously finance huge losses. The stock plummeted. This forced the Swede to change course. Instead of radical growth, achieving profitability became the focus. That succeeded: Delivery Hero ended the past year with profits, albeit only before interest, taxes, and depreciation, and adjusted for special factors such as the expense for stock options.

So, Östberg seems firmly in the saddle, one might think. However, last Thursday it was revealed that US activist Sachem Head could try to overthrow the longtime CEO. The New York-based investor, who is said to have built up a 3.6% stake, is apparently dissatisfied with Delivery Hero's operational performance. The activist, founded by Managing Partner Scott Ferguson in 2012, boasts of having influenced CEO changes in four cases, namely at software company Autodesk, US chemical company Olin, fragrance and flavor manufacturer International Flavors & Fragrances, and service conglomerate US Foods.

But can the Harvard and Stanford graduate actually pose a threat to the company's CEO? A stake of a few percentage points will not be enough unless important shareholders align with him. But they would first need to know exactly what Ferguson intends to do. The argument that Delivery Hero lags behind its competitors in operational performance and stock price doesn't necessarily hold. Competitors like British Deliveroo, in which Sachem Head has also invested, and Dutch-British Just Eat Takeaway are struggling with margin pressure and weak stock prices. Moreover, the decline of once-celebrated quick-food services Gorillas and Flink suggests industry-wide rather than company-specific problems. However, US delivery service Doordash looks better, with its stock having recovered strongly since early 2023.

With assets under management of 3.6 billion dollars, Sachem Head has limited firepower, which hardly allows for building a truly influential stock position. But that's not the strategy of activists either. They keep their capital commitment manageable and try to achieve their goals with partners and through public pressure.

Loyal shareholders like Scottish asset manager Baillie Gifford are likely to be on Östberg's side. They have known the manager, who is an avid long-distance runner and was a member of the Swedish youth national cross-country skiing team, for a long time and have supported his growth-oriented full-throttle strategy. Crucially, it also depends on the largest shareholder, Naspers – the South African media conglomerate holds 29.5% through its investment company Prosus according to the latest information. In addition to this, the upcoming departure of long-serving CFO Emmanuel Thomassin is also a factor. Investors may view replacing the CEO on top of this as unwise.