Loyal shareholders of Blue Apron stock have not been rewarded for their loyalty to the company. Instead, they have only seen their value in their shares collapsing with each passing day. They have watched in horror as the value of the stock has continued to fall ever since it first became public back in the Summer. At that time, it was released as a stock that traded around $10 to $11 per share. Since then, the price has fallen all the way down to about $3 per share.
Investorplace.com reports that the company has a lot of problems, including no difficulty for other companies to jump into its market if they desire to. They say that without the protection of an economic “moat” so to speak to protect themselves from others entering their space, it is difficult to see how Blue Apron could be a good investment for anyone to be involved in at the moment.
A few other players have already hoped into the market. They include a company called “HelloFresh” and of course Amazon. Both have meal kit programs that are similar to Blue Apron. Thus, the competition comes down to name recognition, and it is hard to compete with the likes of Amazon in that realm.
Margins for the company have been under pressure as well. Margins are around twenty percent at the moment, but that is not enough to take care of the mounting administrative and other costs that are associated with running this type of business. When Blue Apron enjoyed a larger profit margin, they could count on a better business outlook. However, that is simply not the case anymore.
One potentially encouraging piece of news for Blue Apron shareholders is the fact that the CEO has stepped down and will be replaced. He was the founder of the company, but it has been determined at this point that the work can better be done by someone else. The fact that the company recognizes this fact is an encouraging sign to some extent for those who are still crossing their fingers that this company may be able to turn things around.
Blue Apron may not be the best investment on the market, but it is hard to deny that the idea was (and is) a very interesting one. Perhaps Blue Apron was just too early to the party on this one. Other companies may perfect the way that this business is run, but Blue Apron may not be around any longer to see how that turns out.