Blue Apron Turns Red; Tumbles Below IPO Price As Underwriters Give Up

Jon Market Commentary

So much for the long anticipated debut of the food delivery IPO, with the big customer churn problem and even bigger cash flow problem.
One day after the company IPOed at a downward revised price (seeing its market cap at $1.9 billion, below its last private round valuation of $2 billion) and broke for trading into the green, only to close at exactly $10.00, Red Blue Apron has now tumbled to $9.50, down 5% from its IPO price just yesterday as the underwriters have given up on protecting the $10 IPO price… and the company.
As a reminder, on Wednesday, Blue Apron sold 30 million shares for $10 each, raising less than two-thirds of the $510 million it had initially targeted. Hours before the pricing, the company lowered the IPO range to $10 to $11 a share, down from $15 to $17. The underwriters hoped the price cut would be sufficient to prevent immediate selling. They were wrong.
Sadly, for Blue Apron, there was good reason for the latest selling avalanche. As Bloomberg reported overnight, shortly after raising $300 million in IPO proceeds, Blue Apron will need much more cash, and soon.

This post was published at Zero Hedge on Jun 30, 2017.