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Analyst: Blue Apron's Lower IPO Pricing Is A Positive

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Analyst: Blue Apron's Lower IPO Pricing Is A Positive

Blue Apron, a home-delivery meal kit service, filed for its initial public offering in June and priced shares in a range of $15 to $17.

The company was forced to lower its offering range to $10 to $11 per share, partly due to Amazon.com, Inc. (NASDAQ: AMZN)'s proposed acquisition of Whole Foods Market, Inc. (NASDAQ: WFM), which is a game-changer for the entire food and grocery segment.

But Blue Apron's revised offering is a "good thing" for investors, Kathleen Smith, Renaissance Capital founder said during CNBC's "Squawk Box" on Thursday. The market is "doing its job" of assigning a more fair value to the company and should help the stock trade better in its IPO debut.

Blue Apron's stock will begin trading Thursday at $10 per share under the ticker "APRN."

But Blue Apron isn't making money and hasn't necessarily communicated a clear path towards profitability, which implies the stock doesn't deserve a premium valuation, she continued.

While the Amazon-Whole Foods merger didn't help Blue Apron's prospects, the company's recent quarterly report "didn't look to good" amid high marketing spend. On the other hand, the company is indeed a leader in the meal delivery segment, which bodes well for investors who believe the market will continue growing over the years ahead.

"That is the proverbial issue that you will have with the stock as it opens today and the back and forth as to whether this is a valid business with a sustainable model," Smith concluded.

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