Still less than three weeks old, Blue Apron (NYSE:APRN) has seen its market capitalization drop more than 30% amid growing concerns of impending industry disruption and worries that long-term margins may not materialize to previously-thought levels.
Perhaps the most poorly-timed initial public offering (IPO) of late, Blue Apron decided to go public at the same time as Amazon.com, Inc. (NASDAQ:AMZN) decided to move forward with a full-out assault on the food industry, promising to revolutionize the way consumers shop for and pay for food with its acquisition of Whole Foods Market (NASDAQ:WFM). In the shadow of these recent developments, any business (especially e-commerce businesses) with ties to the food or grocery industry have been pummeled, and shares of Blue Apron are no exception.
Blue Apron’s business model is one which has been replicated before, however, the company’s current user base is one of the defining factors of the business that insulates it from some of the competition out there looking to chip away at its market share. While growth in this space remains robust, the ability of Amazon to step into an industry and completely disrupt the underlying economics of an entire industry has tech-focused investors shaking in their boots at the prospect of owning a company like Blue Apron.
Until the dust truly settles on this Amazon-Whole Foods integration, I will remain on the sidelines with respect to companies such as Blue Apron.
Invest wisely, my friends.
Tech Insider
