Analysis of Article Blue Apron: Struggling to Woo Investors
In the article Blue Apron, Struggling to Woo Investors, Lowers a Price Range for IPO, Corrie Driebusch explains the attempts of Blue Apron Holdings Inc. (a food-delivery startup) to attract investors by means of offering lower prices for shares during the initial public offering. Namely, the share prices were reduced from 15-17 USD per peace to 10-11 USD. The interesting aspect of this tendency is that with such share prices, the overall value of the company may fall lower than that given at the company fundraiser that took place two years ago.
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As a result of this action, many of the prominent investors started to avoid dealing with the company due to its struggle to find subscribers. In fact, even though the overall revenue of Blue Apron has been seen to grow, its financial reports showed the increasing net losses as well; alongside these changes, the marketing expenditures of the company also grew by 10% over the last year. According to the expert opinions, the major issues faced by Blue Apron currently are the lack of customer loyalty and the complex process of food distribution.
In that way, the company can be attractive to some investors due to its ability to show stable growth in revenue. However, the transformation into a company with strong profit margins does not seem likely for Blue Apron anytime soon. At the same time, statistically, the IPOs that occurred earlier in 2017 showed quite a high rate of success and significant growth in stock value during the offers. Such results leave the potentially high chances for succeeding in the initial public offering of Blue Apron. However, an IPO crisis could become devastating for the business.