After its well-awaited initial public offering (IPO), shares of Blue Apron (NYSE:APRN) have dropped more than 7% since Thursday’s open on widespread investor concern surrounding the recent deal for Amazon.com, Inc. (NASDAQ:AMZN) to acquire Whole Foods Market (NASDAQ:WFM).
Blue Apron management was initially aiming for a $3.2-billion equity valuation prior to the company’s IPO, however the upstart e-commerce food delivery business ended up only achieving a $1.9-billion market capitalization at open, with the valuation decreasing to $1.65 billion as of Friday’s close. This rather disappointing open, coupled with the subsequent decline in the company’s share price Friday, has many investors waiting on the sidelines to see how this stock price performs over the coming weeks and months before making an investment decision.
Investors have also voiced concern with the company’s post-IPO cash position; given the proposed growth plan Blue Apron management has put forward, many investors believe that the cash raised at the IPO may not be enough to sustain this company’s growth plan moving forward, and therefore additional dilution or debt may be on the table in the near to medium-term.
As an e-commerce business built on the foundation of food delivery, investors worried about Amazon’s potential entrance into this space became even more cautious with the recent Whole Foods acquisition being announced just prior to Blue Apron’s IPO. While the timing may have been poor, it appears that Blue Apron will have additional near to medium-term headwinds to deal with, and I would anticipate shares of APRN to share down or sideways before going up.
Invest wisely, my friends.
Tech Insider
