Stocks

Blue Apron Will Get Delisted

Blue Apron Holdings, Inc. operates direct-to-consumer platform that delivers original recipes, and fresh and seasonal ingredients. It also operates In addition, the company offers Blue Apron Wine, a direct-to-consumer wine delivery service that sells wines, which can be paired with its meals; and supplies poultry, beef, and lamb.

Blue Apron is responsible for pioneering meal kits to the masses and went public in 2017.  What they didn’t realize is the barriers to entry were low and quickly faced increasing competition.

After Amazon bought Whole Foods, two weeks after Blue Apron went public, Amazon announced it was entering the meal kit business. Amazon sells its own kits online and inside its Amazon Go cashier-less stores.  Kroger and Albertsons have acquired meal kit companies to sell in their supermarkets as well. 

A week ago Blue Apron Holdings reported a first-quarter earnings loss of $5.3 million, or 3 cents per share.  Sales were $141.9 million, down from $196.7 million in 2018. The number of orders for the quarter slid to 2.48 million from 3.47 million last year.  However, the average revenue per customer was $258, up from $250 because the company has decided to focus on those customers that spend more per meal.  

Nevertheless, these instore options by the competition immediately have killed Blue Apron’s subscription business model.  Ever since Blue Apron went public the stock has been in a decline and hovers near the $1 level.

If the stock slips below $1 and stays there for 30 consecutive days, it will be threatened with a delisting under NYSE rules.

I think the only way Blue Apron survives is if they are bought out.  However, I’m not sure this is Blue Apron’s destiny.  The beginning of the end may start with a delisting and then, you know what comes next.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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