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Marc Lore Is Blue Apron's Last And Only Hope

The Hipster of Bentonville is APRN's Obi-Wan Kenobi.

Even we were surprised that Blue Apron stock got so thoroughly curb-stomped after it's Q3 earnings result revealed that Blue Apron beat estimates but is also still Blue Apron. And, lo, these few days later, we are watching with an arched brow as APRN's value drops like a lead balloon filled with high-end raw meat and uncooked kale.


This is what APRN's 5-day looked like at the end of the day (Ed note: this might be too gruesome for small children):

Screen Shot 2017-11-07 at 4.26.00 PM

It turns out that a hipster-facing internet-powered food play cannot actually use a fluid "growth strategy" to overcome bad fundamentals even if it is being advertised on every podcast your coolest nephew listens to. This is even more true if it's a publicly-traded company.

We'll say it again; Blue Apron is not a bad idea and its founders did a hell of a job bringing it to life. But it should never have gone public. In private, it could have fixed the things that are plaguing it now. As a stock, it drops 20% in one day...on basically sentiment (we know CEO Matt Salzberg said something about profit margins at a New Jersey fulfillment center this morning, but he'd already said it last Thursday)

As of today, APRN shares down by almost 70% since its July IPO. Can anyone help them pull out of this death spiral?

Our eyes turn the chief hipster of Bentonville, Arkansas; Marc Lore.

Walmart's E-Commerce CEO has already been on a cool kid startup shopping spree. Lore has picked up Bonobos, Hayneedle and Parcel, making it clear that he wants to hip-up Walmart's image in the e-retail space. He even told the WSJ D.Live conference a few weeks ago that he is still shopping.

Acquiring Blue Apron would give immediate entree into a demographic that Amazon owns and Walmart badly desires: Chambray-wearing creative types in large cities. The entire value proposition of Walmart buying Jet for $3 billion was an acquihire of Lore, his hipster customer base, and his all-consuming need to destroy his former captor, Jeff Bezos. 

With Amazon now elbow-deep in its integration of Whole Foods, Lore is likely feeling the pressure to do something. Walmart is not going to burn a mountain of cash on a major acquisition in the food space because it already does groceries, and also Walmart is cheap. If Blue Apron was valued at about $1 billion at IPO, Lore could offer $600 million for it right now and have a reasonable hope of seeing that bid accepted. It's only like $20 million over APRN's current market cap, but it also feels way too high.

Blue Apron could act as a trojan horse to get cool kids interested in Walmart's delivery operation, create a situation in which a real competition can be waged for consumer base in North Brooklyn, South Austin and all of Portland. As Amazon's dark persona of corporate juggernaut grows larger, Walmart might even see some Prime subscriptions fall away in these Woke zip codes. Surely $300 million is worth the opportunity to be there when/if that happens.

Ending up inside the enormous, bland, fluorescently-lit hangar of cheap shit that is Walmart's corporate soul is not the ideal end for Blue Apron's founders, but it's not death. And looking at what we're seeing right now, that might be even more than Blue Apron can hope for.



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