Why Investors Find Blue Apron Stock Unappetizing
Blue Apron stock tanking after IPO
Blue Apron (APRN)—a meal kit delivery company—went public on Thursday, June 29. The company delivers ingredients along with recipes to help cook meals. The company’s stock has been falling since its debut in the stock market. The company significantly lowered its IPO (initial public offering) price range from $17–$15 to $10 per share.
Typically, firms that go public surge on the first day of trading. However, investors have found Blue Apron stock unpalatable in the first week of trading, as the graph below shows. The company’s market capitalization now stands lower than $1.8 billion. This number represents a discount to the $2 billion the company got in a private round back in 2015.
Blue Apron’s shares closed more or less flat at $10.01 on its opening day. Its stock fell on Friday but rose slightly on Monday, which was a half-day. However, on Wednesday, July 5, Blue Apron saw its biggest decrease. The company’s shares fell 8.5% to $8.84 on Wednesday.
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Why Blue Apron stock is falling
The company’s revenues have surged from $77 million in 2014 to $795 million in 2016. However, like most other startups, its earnings are still in the red. The meal kit delivery company also had trouble with company retention. It has spent increasingly on marketing, and investors are worried about the impact.
The New York–based company has several competitors, including Plated, HelloFresh, and Sun Basket, which offer a similar meal kit delivery model.