The service sounds similar to meal kit delivery services like Blue Apron and HelloFresh, which regularly mail groceries to a customer's doorstep so that they can cook dishes without any extra trips to the store. When you combine that with slowing revenue growth, dismal customer retention rates, contracting margins, and rising expenses, Blue Apron becomes a high-risk stock for investors' money.
Johnson & Weaver, LLP, is investigating potential violations of federal and state laws by certain officers and directors of Blue Apron Holdings, Inc. (NYSE: APRN) ("Blue Apron"). Blue Apron is structured as a subscription service in which users get a set number of meal kit boxes per week, whereas meal kits on Amazon Fresh appear to be one-off purchases.More news: To play under franchise tag this season
Blue Apron has a lot to prove now and show Wall Street that it's not just a niche business that makes sense as part of a greater delivery empire like Amazon. Techcrunch noted that Amazon has filed for two other trademarks related to meal kits this year, including another slogan, "We prep". Now it may expand into meal kits.
Blue Apron stock has been consistently threatened by Amazon since its IPO last month because of Amazon's acquisition of Whole Foods (WFM - Free Report). Just 12 trading days later, the company is worth less than $1.3 billion. Shares closed Friday at $7.36, or 26.4% below the IPO price. If the company becomes strapped for cash, it may increase its borrowing capacity under a revolving credit facility or raise additional funds through equity or debt financing arrangements, the filing said.
This long-rumored news is a blow to Blue Apron, which even after its June initial public offering has been marketing furiously to acquire new customers. That's less than what the company was worth when it operated as a private "unicorn" in 2015.