Things just keep getting worse for Blue Apron.
After reporting yet another disappointing set of earnings last week, the company is now saying that a move from one New Jersey fulfillment center to another is incurring “unexpected costs.”
That was the last straw for many investors, who sent the company’s stock careening to new lows on Tuesday.
Here’s the Blue Apron’s stock chart since going public at the end of June.
Blue Apron chief financial officer Brad Dickerson told investors that the company is still training workers, and it could be months before the new facility is fully operational.
This is hardly the first disappointing bit of news for the meal kit service’s investors. The company has been caught in a downward spiral ever since its lackluster initial public offering just a few months back. As of this week, it’s now lost nearly three quarters of its value since that debut. Shares dropped 20 percent on Tuesday alone.
While the company’s initial poor performance was blamed on Amazon’s announcement of a competing service just days before its IPO, it’s now become clear that the company’s problems are bigger than its monster competitor.
The first signs of trouble came in the papers Blue Apron filed to announce its intention to go public. The filings indicated that the amount of marketing needed to lure each new customer had been ticking upwards for months and imposing heavy losses on its balance sheet. Worse yet, the customers Blue Apron did have tended to stop using the service rather than become devoted fans.
Blue Apron’s growth is directly tied to the amount it spends on marketing, but the company said this week that it would be easing up on that expense because the transition between warehouses was causing it to get orders wrong.
Meanwhile, Germany-based competitor HelloFresh put to rest the idea that Blue Apron’s dismal IPO was simply the result of its business model or a bad tech market. Its debut as a public company has been a success, and its business is now growing three times faster than Blue Apron. That has pushed its valuation to twice the size of its American rival.
It’s already coming time to ask whether Blue Apron actually has a future as a public company when it seems to have nowhere to go but down.
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