Market Overview

Blue Apron Slashes IPO Range To $10-$11 Per Share

Blue Apron Slashes IPO Range To $10-$11 Per Share

Blue Apron, a home-delivery meal kit service, filed for its initial public offering in early June.

Management was likely confident in its prospects as it's able to target 99 percent of the U.S. population and offer fresh food and a fun at-home experience, two of the biggest trends today.

However, Blue Apron now expects to price its IPO at $10 to $11 per share, down from a prior range estimate of $15 to $17 per share.

See Also: Amazon's Acquisition Of Whole Foods Has One Notable Casualty: Blue Apron's IPO Plans

What Has Changed?

Since filing for its IPO, the entire food landscape drastically changed after, Inc. (NASDAQ: AMZN) announced it plans to expand its business to include a brick-and-mortar seller of organic, natural, and fresh foods by purchasing Whole Foods Market (NASDAQ: WFM) for $13 billion. Blue Apron's investors are now skeptical of it business model, the timing of the IPO and are wondering if the company is "trying to go out now before things get worse," CNBC's Leslie Picker noted.

Not only has Blue Apron never reported a profit, the company's losses grew on a year-over-year since 2014, Picker added. On top of that, the company's multiple share class structure implies any investor concerns over the direction of the company will be limited.

"Blue Apron may not be able to get people to pay at the high end of the range it has been marketing where its valuation is worth more than $3 billion," she said.


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