Shares of Blue Apron Holding Inc. (APRN -6.12%) were falling today, reversing gains the stock made yesterday after the meal-kit service got an odd endorsement from a TV celebrity. After yesterday's 14.7% jump, the stock sold off today as investors seemed to realize that those gains were unwarranted. At 12:05 p.m. EDT, the stock was down 7.6%.
On CNBC's Power Lunch, Kevin O'Leary, one of the stars of Shark Tank, said during the show's mock Stock Draft, which it was doing in honor of the NFL Draft last night, that he would buy shares of Blue Apron. O'Leary explained his choice, saying, "Having gotten close to that industry, getting involved with Plated, which was acquired by Albertsons ... I thought: 'I know this space. Blue Apron can't survive on its own and it'll get acquired,' and I'm thinking the acquisition price could be between $4 and $5."
Blue Apron's sudden surge inspired skepticism on Twitter yesterday, so it wasn't surprising to see the stock come back down today.
The fact that Blue Apron stock soared merely on O'Leary's pick in a game signals that the "buy" case has gotten especially weak for the meal-kit provider. As he said, at this point it seems like the best argument for buying the stock is the potential it will get acquired.
Blue Apron has been losing share to rival HelloFresh, and is facing new competition from Walmart and Weight Watchers. However, management will have a chance to change the narrative when the company reports first-quarter earnings on May 3.