Ocado has suffered a disappointing first month of trading on the London Stock Exchange, with its shares losing 20.7% of their value.

The online grocer floated on July 21 at 180p and immediately fell to 155p. Since then shares have shown a steady decline and on Tuesday closed at 135p.

Last week Ocado came to the end of its stabilisation period, which means its stock can no longer be propped up by Goldman Sachs.

Broker Merrill Lynch initiated coverage of Ocado with an underperform rating. Analyst Andrew Gwynn said: “10 years of losses may, by 2011, finally become a small profit but Ocado has a long way to go before reaching its medium-term margin ambitions.

“Good though sales growth will probably be, the market typically pays for earnings rather than sales growth alone and as yet, there’s not much ‘E’ to value the shares.”

Ocado will post an interim management statement on September 7.