Blue Apron IPO: Maybe this is why there’s such little demand

Blue Apron went public this morning with stock prices opening at $10 per share. The company marked down its offering price range from $15-$17 per share to $10-$11 the day before. The change is indicative of how little demand there is for this public offering. Why? Because the meal kit purveyor spends excessive amounts of money on attaining customers and their life-time value is low—meaning they don’t stick around. As investment site Value Penguin notes, the best-case scenario is that competitors fall away and Blue Apron is able to bring down customer acquisition costs. But that’s unlikely given the vast number of competitors and Amazon‘s interest in on-demand meal kit delivery (not to mention its recent Whole Foods purchase). There’s also this: 

“To exacerbate things further, Blue Apron is running out of cash. While it only has $60mn of cash and $150mn of debt on its balance sheet, it was burning $20mn in just 1 quarter. No wonder it is still going through with the IPO after the 35% cut in its valuation: they must be desperate for funding.”

[Photo: Patrick Tomasso]