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Why Blue Apron Is Falling 4% Today

By Rich Duprey - Jun 17, 2021 at 3:24PM

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The hangover from its dilutive transaction continues to cause headaches.

What happened

Shares of Blue Apron (APRN -6.29%) were down 4% in afternoon trading Thursday, continuing to drop after the meal kit maker yesterday priced a stock offering of 4.7 million shares at $4.25, a 23% discount to the $5.53 per share level it closed at on Tuesday.

So what

Blue Apron is attempting to benefit from the minor rally its stock was enjoying. Shares had risen 50% from around $4 a stub in early May. It's still well below the $15 price they hit during the meme stock craze in January, but the bump in the stock apparently caused management to try to scrounge up $20 million in proceeds.

Blue Apron meal kit

Image source: Blue Apron.

Now what

The company was on its heels prior to the COVID-19 pandemic striking, but with people forced to stay at home, having meal ingredients delivered to the door became a saving grace. Blue Apron's business soared and now it's counting on the new customers it gained during the crisis to remain afterwards.

President and CEO Linda Kozlowski told PYMNTS, "As a result of the pandemic, we saw that cooking habits increased in 2020, and both third-party and our internal research support that those habits are expected to continue to some extent into 2021."

The meal kit delivery company still might be a hard sell as people are looking forward to eating out again after more than a year of being at home. 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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