Blue Apron Prices IPO: A Huge Disappointment?

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Blue Apron Holdings has registered an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). Blue Apron has officially priced its 30 million shares at the low end of its expected range of $10 to $11. There is an overallotment option for an additional 4.5 million shares as well. At this price, the entire offering is valued up to $345 million.

Just to point out, the previous price range was $15 to $17 per share, and the current price relative to the middle of this range is a drop of 37.5%, or about $207 million of its offering valuation out the door.

Keep a look out for updates later in the day when shares actually enter the market.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, Citigroup, Barclays, RBC Capital Markets, SunTrust Robinson Humphrey, Stifel, Canaccord Genuity, Needham, Oppenheimer, Raymond James and William Blair. The company intends to list its shares on the New York Stock Exchange under the symbol APRN.

This company was founded in 2012, premised on a simple desire: its founders wanted to cook at home with their families, but they found grocery shopping and menu planning burdensome, time-consuming and expensive.

Since its inception, Blue Apron has scaled rapidly, developing its expertise and an ever-more ambitious vision. From inception through March 31, 2017, the company has delivered over 159 million meals to households across the United States, which represents about 25 million paid orders.

Its customers often cook using Blue Apron’s products multiple times each week. The company sells to customers in 48 states, spanning most demographics.

In the filing, the company detailed its financial results as follows:

In 2014, 2015, and 2016, we generated $77.8 million, $340.8 million, and $795.4 million in net revenue, respectively, representing growth of 338% from 2014 to 2015 and growth of 133% from 2015 to 2016. In the three months ended March 31, 2016 and March 31, 2017, we generated $172.1 million and $244.8 million in net revenue, respectively, representing growth of 42%. In the years ended December 31, 2014, 2015, and 2016, we incurred net losses of $(30.8) million, $(47.0) million, and $(54.9) million, respectively, and in the three months ended March 31, 2016 and March 31, 2017, we generated net income of $3.0 million and incurred net losses of $(52.2) million, respectively.

Blue Apron intends to use the net proceeds from this offering to repay indebtedness, with the remainder going toward working capital and general corporate purposes.