Why Blue Apron Holdings Inc. Stock Lost 29% Last Month
What happened
Shares of Blue Apron Holdings Inc. (NYSE: APRN) have been looking rotten, falling 29% in July, according to data from S&P Global Market Intelligence. The stock slipped throughout the second half of the month as several pieces of news seemed to drive away investors in the meal-kit service, Whole Foods armed itself for Amazon Prime Day, rival Chef'd suspended operations, and the market anticipated its second-quarter earnings report.
The chart below shows how the stock dove over the last two weeks of July.
So what
Blue Apron stock actually came into the month on a roll, having nearly doubled from its bottom below $2 in April. In fact, the stock continued to gain through the first two weeks of July. It jumped 8% on July 10 on an apparent short squeeze and rumors of an acquisition and followed that up with another 7% gain on July 12 for seemingly similar reasons.
Image source: Blue Apron.
However, it turned south shortly after that. Investors seemed to be rattled by rampant discounts at Whole Foods on Prime Day, not the first time that investors have been scared away by the threat of Amazon/Whole Foods as the merger forced Blue Apron to take a lower IPO price than it had initially wanted.
Then, the stock continued to fall when Chef'd revealed it was suspending operations after running out of cash and not being able to get more funding. News that popular fast-food chain Chick-Fil-A would begin selling its own meal kits also took a toll on the stock. Finally, it tumbled at the end of the month, with the company's earnings report right around the corner.
Now what
Those fears about Blue Apron's earnings report were confirmed when the company said last Thursday that revenue fell 25% in its second quarter, much worse than expectations. Though Blue Apron made some improvements in operational efficiencies, management acknowledged that the path back to revenue growth would be slower than anticipated. Given the concerns about rising competition and other challenges, that forecast helped push the stock down 24%.
Following that report, there should be more volatility ahead for the stock as hope remains that it could get bought out or mount a comeback.
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Jeremy Bowman 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.
