Shares of Blue Apron Holding Inc (APRN -0.39%) were surging today after JPMorgan Chase disclosed that it had increased its stake in the struggling meal-kit provider. In a filing, the big bank revealed that it now owns 13.8% of Blue Apron stock, up from 11.2% in July. As of 12:24 p.m. EST, shares were up 2.8%.
It's not surprising to see Blue Apron moving higher on such news, especially considering the company's recent troubles, as a vote of confidence from JPMorgan goes a long way to persuading retail investors that the stock may have a better future. As an institutional investor, JPMorgan can speak directly with management, so the bank may have gotten a clearer picture of where the company is headed under new CEO Brad Dickerson.
After shares popped following news of Dickerson's promotion to CEO in December, the stock gave up much of those gains and was trading near all-time lows before today's news.
There's no question that Blue Apron has fumbled its way through its short life as a publicly traded company. The company botched a transition to a new highly automated facility in Linden, New Jersey, leading to layoffs and a cutback in marketing, which in turn led to a slowdown in sales growth, causing panic among investors. Even before Dickerson took over as CEO, the C-suite had been a revolving door, indicating dissension in the ranks, and questions about the business model itself remain as the company seems to struggle to retain customers.
Blue Apron reports fourth-quarter earnings on Feb. 13. While the company has already forecast a decline in sales for that period, the first quarter is seasonally its strongest. With the new plant now operating, the company has no excuses. Pay close attention to guidance when Blue Apron reports next month, as that could determine whether or not shares can bounce back.