NEW YORK (AP) — Meal-kit delivery company Blue Apron on Wednesday slashed the price it expects to sell its shares in an initial public offering, a sign that it may be having trouble attracting investors.
The price chop for Blue Apron's IPO comes as competition to deliver groceries heats up.
Blue Apron already has many meal kit competitors, including HelloFresh and Plated, which ship boxes to customer's doorsteps with all the raw ingredients needed to make home-cooked meals. E-commerce giant Amazon.com Inc. is expected to shakeup the industry after announcing plans to buy organic grocer Whole Foods earlier this month. And Amazon already sells meal kits in some cities with recipes created by media mogul and TV cook Martha Stewart.
Blue Apron said that it now expects its IPO to be between $10 and $11 per share, down from its forecast a week ago between $15 and $17. The New York company still expects to sell 30 million shares, raising as much as $330 million in its IPO under the new range. That's down from the $510 million it would have raised at the high end of its previous IPO range.
Concerns about the Amazon and Whole Foods deal are part of the reason for the cut, said Kathleen Smith of Renaissance Capital, which manages IPO exchange-traded funds. But investors may also be spooked by the poor performance of tech companies that recently went public. Since the beginning of the year, the average IPO priced closer to the low-end of its expected range, she said
"IPO investors are cautious," Smith said.
Blue Apron, which was founded five years ago, has never made a profit. But its revenue skyrocketed to $795.4 million last year, more than double its level in 2015. The company said it had more than 1 million customers at the end of March.
The company said its stock will be listed on the New York Stock Exchange under the symbol "APRN."