Blue Apron serves up lukewarm IPO

Blue Apron serves up lukewarm IPO

IT

Meal delivery business Blue Apron opened for trading at $10 per share on Thursday, significantly below the originally proposed range of $15 to $17.

Less than 24 hours after collecting $300 million in its initial public offering, Blue Apron Holdings Inc. faces the reality of needing more cash - and soon. The New York company still expects to sell 30 million shares, raising as much as $330 million in its IPO under the new range. Altice USA, the stateside affiliate of Dutch telecoms company Altice, also announced plans to issue no-vote shares in its own listing, .

The pressure on New York-based Blue Apron - and the entire grocery sector - mounted with Amazon.com Inc.'s agreement to buy Whole Foods Market Inc. for $13.7 billion. That single line inside a 214-page prospectus seems to have caused investors to recalibrate Blue Apron's worth just as its roadshow was beginning.

Shares of stock in the meal delivery service Blue Apron began trading publicly on Thursday morning, opening at $10 before rising above $10.50. More importantly, they want to know how much that slice will cost them.

Like many startups looking to go public, Blue Apron is still losing money, although its revenues have increased from $78 million in 2014 to $795 million in 2016.

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At $10 a share, believers in the stock suggested the IPO should value the company around $1.89 billion.

Smith said the lowered valuation was likely a "smart move" and that the company may be able to reach its $2 billion or even $3 billion valuation later on, particularly as Renaissance estimates that the company has a 50% market share in the meal-kit space.

For the first three months of this year, Blue Apron reported a net loss of more than $52 million, according to the company's SEC filing.

Late a year ago, Blue Apron put its IPO plans on hold while it focused on improving financials, people familiar with the matter said in December.

At the end of the first quarter, Blue Apron had 1 million customers who made 4.1 orders each - compared with 649,000 customers making 4.5 orders apiece a year earlier. The company plans to list on the NYSE under the symbol APRN.

  • Kyle Warner