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Blue Apron Fell ~5% after Board Approved Reverse Stock Split

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Jun. 14 2019, Published 1:20 p.m. ET

The announcement

On June 13, Blue Apron (APRN) announced that its board had approved a reverse stock split of 1-for-15 for its Class A and Class B common shares. The reverse split is intended to raise the price of the company’s common stock to comply with the New York Stock Exchange (or NYSE) listing standards and also to improve liquidity.

Blue Apron expects its reverse stock split to be effective after the market closes on June 14, 2019, and its Class A common stock will start trading at a split-adjusted price on the NYSE beginning June 17. The company’s management is also hoping that its reverse stock split strategy should be sufficient in order to get back in compliance with the NYSE’s continued listing standards by as early as July 1, 2019.

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Stock performance

After the announcement of the board’s approval for the reverse stock split, Blue Apron’s stock fell 4.9% in aftermarket trading hours on June 13. YTD, the company’s stock price has declined by 36.1%, underperforming the broader equity market, where the S&P 500 Index has increased by 15.3% during the same period. Blue Apron had posted its first-quarter earnings on April 30. The company had reported a revenue of $141.89 million, which fell short of analysts’ expectation of $150.56 million. Its orders during the quarter had declined by 29%. However, its loss per share was better than analysts’ expectation of $0.06 at $0.03. The declining revenues and a shrinking customer base due to increased competition have been putting pressure on the company’s stock price.

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