Aug 22, 2020
Blue Apron “The Sinking Ship”
I got a notification on Robinhood that Blue Apron’s earnings were coming up and I immediately bought puts to ride out their 2nd quarter numbers. As expected, their earnings beat expectation…but even those results could not save the stock from sinking.
Over the 2nd quarter of 2020, Blue Apron only added an additional 40,000 new customers. Considering right now would probably be the most successful time for their company…this is just sad. Between restaurants being closed and consumers being tired of eating delivered pizza. Their business model should be flourishing right now, but somehow they have only added 40,000 new members. With over 330 million people in the United States, and all of them experiencing stay-at-home orders…Blue Apron is underperforming in the best market conditions.
This company experienced a brief period of being an industry pioneer in the meal delivery space. Although, the last couple of years have not been forgiving. They went through a 15–1 reverse stock split last June. After experiencing some bullish momentum at the beginning of the pandemic, it quickly receded compared to many other Coronavirus stock favorites. The stock is down nearly 40% just in the past month. For years this company has been bleeding money in an unprofitable dive towards bankruptcy. As Blue Apron fights to exist, other companies in this space have flourished. Hello Fresh, Plated, and Home Chef have all exploded in popularity in the last couple of years…all taking market share from the older Blue Apron. Other then a cheap acquisition, Blue Apron can’t be desirable to investors. For context, those that bought shares at the $11 dollar IPO price have lost about 80% of that original investment.
Sadly, even though the financial demise of this company is evident, it still has a fascination with Robinhood traders. For as long as Robinhood has existed, Blue Apron has been one of the top 20 traded stocks on the platform. Blue Apron is currently sitting around a $150 million dollar market cap…and sinking fast. Investors may get lucky and see an acquisition in the future. Still, the likelihood this company goes bankrupt increases every day. Even though their name recognition is popular, investors should be wary of any long-term positions with this company.
