clock menu more-arrow no yes

Filed under:

How Amazon's Plan to Buy Whole Foods Is Affecting Blue Apron

It’s awkward timing for the meal kit company’s IPO

Blue Apron ingredients in bags.

Meal kit trailblazer Blue Apron is going public and is set to begin trading Thursday on the New York Stock Exchange — but its initial stock price won’t be nearly as high as initially thought. The culprit? Amazon — or more specifically, Amazon’s recent play to buy out Whole Foods, a strategic move that’s expected to have a hefty impact on numerous industries.

Blue Apron originally said that the 30 million shares it’s putting up for sale would be initially priced in the $15 to $17 range, but as Bloomberg reports, that’s now been slashed to $10 to $11, or by roughly a third. Even still, the lower stock price would give the company an overall valuation of around $2 billion, which is no small potatoes for a company that has yet to turn a profit.

Grocery store stocks took a hit following the announcement of a potential Amazon-Whole Foods merger, and such a blockbuster deal could also mean some serious competition for Blue Apron. While the meal kit industry has become heavily saturated in the years since Blue Apron launched in 2012, an Amazon-Whole Foods deal could create a potentially game-changing food delivery monolith; both companies have dabbled in meal kits already, and by joining forces, Amazon could use its competition-crushing delivery capabilities to tap into Whole Foods’ loyal customer base.

Blue Apron counted more than a million customers in the first quarter of this year, but has continued to lose money each year it’s been in business. At an initial stock price of $10 to $11, the IPO will raise more than $300 million, which could be the boost the meal kit company needs to finally turn a profit.

Blue Apron Slashes IPO Price 34% as Amazon-Whole Foods Looms [Bloomberg]
Blue Apron Is Going Public. Here’s What We Learned From Its IPO [E]
Blue Apron Loses Money Every Year and Soon You Can Own Stock In It [E]

Sign up for the Sign up for the Eater newsletter

The freshest news from the food world every day