Blue Apron’s IPO gain fades despite investor backing
Amazon’s deal clouds meal-delivery market
Shares of Blue Apron Holdings, a meal-kit delivery company backed by Silicon Valley investors, rose 1% after they were initially offered to the public Thursday, reflecting the indus- try’s outlook that’s been clouded by technology and evolving consumer habits.
Blue Apron offered 30 million common stock shares in the Thursday IPO in the New York Stock Exchange and initially set the opening price at $10 per share, settling for the low-end of the pricing range.
Shares spiked 98 cents after they began trading to $10.98 on late Thursday morning, but the gains were soon pared back. They were up 11 cents to $10.11 by early afternoon. The IPO raised about $300 million that the company plans to use for expansion.
A day earlier, Blue Apron had cut the pricing range it sought to $10 to $11 from $15 to $17 it estimated less than two weeks ago, a one-third cut in its valuation to about $2 billion.
The IPO comes less than a month after Amazon announced a blockbuster deal to buy Whole Foods Market for about $13.7 billion, triggering sell-offs in grocery stocks and speculation that grocery retailers will seek mergers to fend off competition.
Blue Apron focuses on home delivery of boxes with fresh ingredients and recipes that are used for home cooking. But the Ama- zon-Whole Foods union is expected to unleash massive changes that could affect a wide swath of food suppliers and other retailers.
Whole Foods already sells ready-to-cook meal kits. Amazon is nearly peerless in delivery and pickup logistics and cutting prices.
From Blue Apron’s start through March 31, the company has delivered more than 159 million meals to U.S households, the company said. Its customer base has more than tripled since 2015.