Blue Apron Holdings Inc.'s (NYSE: APRN) days, despite first debuting on the NYSE as recently as June 28, may be numbered.
Amid rumors of the company having to go public to raise desperately needed cash, it made its debut exactly when tech stocks were tumbling. As if that wasn't hard enough, its debut also collided with the announcement that Amazon.com Inc. (Nasdaq: AMZN) was buying Whole Foods, knocking the company's pre-IPO valuation down from $3.2 billion to $1.9 billion.
Since the stock began trading in the open market, it's down a whopping 36%.
A big chunk of that loss came this week, some might say out of left field.
Left field is, of course, where Amazon lurks before pouncing onto center stage and upending whatever game everyone's playing. The business that Blue Apron thought it controlled got punched in the gut by what Amazon just did.
Here's what it means for Blue Apron, and how to profit from their almost inevitable end…
Why the Service Left a Bad Taste in My Mouth
I admit I tried Blue Apron – not the stock mind you, I wouldn't touch that with a 10-foot pool. I tried the meal delivery service.
It wasn't my idea. A couple who I'm good friends with were telling me they liked following Blue Apron's recipes and cooking together. They (and their two children) thought the dishes were delicious, so they "gifted" me a box of three meals.
Blue Apron encourages subscribers to gift a box of meals to friends and even strangers. The idea makes sense: you get a box of three different meals complete with every ingredient you'll need, individually wrapped, with recipes for three meals – in my case, for two people – packed in ice and delivered to your front door.
I opened the box I got about a week later, admired how everything was packed (except for the waste factor), followed the mostly easy recipes and mostly enjoyed the meals.
What happened next was interesting.
Without intentionally signing up for the service, a week later I started getting once-a-week deliveries of Blue Apron boxes. The billing magically showed up on my American Express.
At less than $10 per meal per person, I went with it to see what else they would send me.
The bottom line is this… I'm a decent chef and I like to cook. I found the Blue Apron recipes fairly easy, but the time to make most of the dishes took longer than I would have preferred.
While I could get over that if the meals were interesting and exotic enough, which I will happily say that some were, the fact is many of them ended up being disappointing in the taste department.
And being single, always cooking for two when it was often just me resulted in leftovers, or (who would have guessed) eating more than I should have. Maybe that explains that extra 10 pounds I'm carrying around.
After two months, or about eight deliveries, I cancelled the service. Except I never got confirmation that my cancellation notice was received, and boxes kept coming.
Last week, again, I followed the instructions to cancel the subscription, adding a curt note in the email. Hopefully, this time it sticks.
They won't get paid because I've already notified American Express, who are amazing at taking care of issues like this. So Blue Apron, which is losing money, will be wasting more of their money if they keep sending me gifts.
What's telling in my little story is that cancelling Blue Apron subscriptions is almost epidemic.
In Wednesday's article, I listed some frightening retention rates for meal-kit deliveries and said that should be a huge concern for Blue Apron and its shareholders.
But what's a much bigger concern for Blue Apron is what Amazon put out this past weekend.
How to Profit from APRN
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.