Please ensure Javascript is enabled for purposes of website accessibility

Why Blue Apron Stock Popped Today

By Jeremy Bowman – Apr 3, 2019 at 12:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A surprise CEO change had investors looking up.

What happened

Shares of Blue Apron (APRN 2.32%) jumped today on a surprise management change at the company. CEO Brad Dickerson, who took the helm in December 2017, is out, and Linda Kozlowski, who was previously COO at Etsy, is in. Investors seem hopeful that the move could turn around Blue Apron's dismal performance, as revenue is tumbling and the stock trades at just around $1 today. Shares of Blue Apron were up 9.4% as of 10:53 a.m. EDT to $1.06.

So what

The company said Dickerson was resigning to pursue other opportunities, though it is unclear where he is headed. He will remain with the company in the near term to assist with the transition, and Kozlowski will officially become CEO on April 8. The meal-kit service also said that Co-Founder and Chief Technology Officer Ilia Papas would be leaving the company to pursue other opportunities, but it has a transition plan in place for that position.

A collection of Blue Apron meal kit ingredients.

Image source: Blue Apron.

Given that Papas and Dickerson are both suddenly leaving the company, the stock's gains today are surprising. But investors seem to be optimistic that Kozlowski can help drive Blue Apron's turnaround given the success that Etsy has had, as that stock has grown more than 700% over the last three years. Prior to joining Etsy, Kozlowski had been the COO at Evernote and a marketing executive at Alibaba.

Chairman Matt Salzberg said: "We are incredibly excited to have an executive of Linda's caliber as Blue Apron's next CEO. Linda's exceptional leadership and marketing expertise, as well as her understanding of Blue Apron customers as a longtime customer herself, will help her advance the company toward sustainable, profitable growth."

Now what

Though Blue Apron shares continued to fall under Dickerson's stewardship, he did help the company narrow its losses and reset its strategy to moving toward profitability rather than pursuing unsustainable growth, which the company is delivering on. Blue Apron reaffirmed its guidance to report positive adjusted EBITDA for the first quarter and the full year as well as a significant improvement in net loss. The company will report first-quarter earnings on April 30.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Etsy. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.