Blue Apron

Blue Apron (APRN) went public only 10 trading days ago, but that short time frame has not prevented it from losing over 24% of it’s value. You read that right, over twenty four percent in only 10 days! The day before the IPO Blue Apron’s price was reduced to $10/share, down from range of $15 to $17. That right there was a big, bright flashing warning light for all investors to see. APRN closed today at $7.56, the stock will have to rally almost 33% just to get back to even with its initial IPO price.

 

I outlined Blue Apron was a sketchy IPO to begin win so I’m not too surprised. My bet is that this stock still has a lot of room to move lower.

SNAP

SNAP (SNAP) is yet another sad IPO story, but still one everyone should have seen coming. There is nothing really proprietary about SNAP, nothing that Facebook/Instagram can’t copy and roll out to their much larger user base. The stock price is reflecting this reality by trading below its $17 IPO price:

SNAP officially closed below $17 on Monday and today its getting closer to $15/share. Also remember $17 is not the true IPO price for retail investors like you and I. Most people had to buy at it’s opening price of $24/share and SNAP hasn’t closed above that price since its second day of trading. $24 to $15.24 is a 32% drop in value, value I bet isn’t coming anytime back soon…if ever.

Dangerous IPOs

I stay far, far away from IPOs, far too often they are for suckers. Wall Street knows IPOs play on investor psychology and the fear of missing out. Too many people feel like they are missing out on the next big wave, the next hot stock, and put their money into loser companies.

If investors would just wait a while (6 months, or maybe even a year) that would allow to see if companies like Snap or Blue Apron were really worth investing in. Unfortunately that is not how most investors think, and the losing a quarter or a third of your money is the result.