Don't look know but Blue Apron is technically no longer a penny stock.
As of this morning, APRN was back over $10 a share thanks to a 30%+ run-up on a company that we were pretty sure had been left for dead [or Lore] months ago. So what happened? You ask. Did the relatively new CEO cut costs and deliver new guidance of improved top-line growth thanks to some problem-solving in the area of retaining subscribers and stabilizing revenue? Hahahaha, of course not. You sound so dumb...
Blue Apron Holdings Inc. saw its best day in six months after announcing a tie-up with a hot brand: Beyond Meat Inc.
The struggling meal-kit company will begin introducing products from the alternative-meat startup on its menus in August, New York-based Blue Apron said in a statement. The shares rose as much as 22% on Tuesday, their biggest intraday gain since Jan. 15.
That's right, Blue Apron's stock is soaring on news that it's linked up with Beyond Meat to forge a new reality in which Blue Apron is yet another venue through which consumers can try plant-based meat products and then decide if they want to keep spending money on something that they were eager to try once and might never try again or will likely purchase elsewhere on a cheaper, a la carte basis.
Blue Apron has clearly learned its lesson:
Blue Apron’s struggles stem from the meal-kit industry’s challenges attracting and retaining customers. Although subscriptions were originally marketed to people who wanted to cook but didn’t know what or how, it was soon beset with complaints: The meals were too expensive, you had to plan ahead, and people felt guilty throwing away all the packaging required to keep ingredients fresh. The nascent meal-kit industry found luring and retaining customers required margin-eating discounts and often didn’t work.
Fake meat solves...the part about attracting customers, and literally nothing else.
Again, we find ourselves looking at Blue Apron and saying, "We like this company, it's a good idea that might someday make a sustainable profit or become an attractive acquisition target for an e-commerce giant, but it's an especially poor public company in this market where everything moves much to hard much too fast on information that is dumb."
Look at the 5-Day chart:
Nothing has changed on this chart other than the notion that Blue Apron will offer fake meat. The company is still fighting to cut costs while facing shrinking revenue and some serious growth headwinds...but it's selling fake come August. That's not enough to push any stock up by like 40% in three hours, it's simply an unfair amount of optimism to foist on a company that is literally fighting to survive.
There's still a chance that Blue Apron pulls off the "Etsy 180" it's clearly attempting, but that takes mercilessly single-minded leadership, deeply painful cost management, luck and time. This whole "Hooking up with a new celebrity" thing is good marketing, but in terms of BUY signals on APRN...oh, buddy, this ain't it.
Blue Apron is a cipher of this batshit equities market, and this market is going to kill Blue Apron.