Blue Apron, Red Apron, Pink Apron, Either Way It’s A No For Me Dawg

Another day another initial public offering. On Thursday NYC based meal prep company Blue Apron (APRN) has its IPO. They hope to exceed a market capitalization of $3 billion dollars, pricing the shares between $15 and $17. I’m sure they’re relieved their IPO wasn’t today¬†with all the doom and gloom in the market. Hopefully for their sake markets rebound tomorrow providing a far more positive trading environment for an IPO. Below are some of the key financials for Blue Apron:

  • 2014: Revenue – $77.8 Million // Loss – $30.8 Million
  • 2015: Revenue – $340 Million // Loss – $47 Million
  • 2016: Revenue – $795 Million // Loss – $54 Million

Marketwatch has even more info on Blue Apron’s financials. I’m not smart enough to predict if a meal prep company is worth $3 billion dollars, but I bet a lot of people will think it’s worth that and more tomorrow. I really don’t care what the company’s financials are, my rule of thumb is to stay as far away from all IPOs as possible. My philosophy is to let them grow and get their sea legs, prove they are a company worth investing in. Give them at least a year or so to prove their worth. There are far too many examples of failed IPOs for individual investors not to get the message to stay away.

Most recently I’ve been watching Snap and true to form the stock hasn’t performed very well post IPO. I’m going to add Blue Apron to my watch to see if it suffers the same fate. I would steer clear of Blue Apron tomorrow, but if you choose otherwise good luck.

***UPDATE***

The Market has spoken! Blue Apron has cut its IPO price from $15 – $17 a share down to $10 per share. This cuts its valuation to $1.9 billion, down from the original $3.2 billion and down from the $2 billion valuation set in the last round of private financing.

I guess my take on the company was incorrect, it appears investors were not lining up to buy this company at such a high valuation. The fact that it has never made money may have something to do with it. According to research firm S3 partners, 60% of customers leave the service within 3 months. That’s going to make it hard for this company to ever be profitable, especially with its super high customer acquisition costs. Like I said, when it comes to Blue Apron it’s a no for me dawg.

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