Monday, August 14, 2017

Stocks to Watch: Blue Apron $APRN

Blue Apron ($APRN), $8.27.

Expanding the recent post about the unicorn companies and their future, it does not stop calling attention the terrible performance that the recent IPO of the Unicorn Blue Apron APRN is having, almost 20% below its starting price. Comparisons, in this sense, with Snapchat SNAP, Fitbit FIT or Groupon GRPN are immediate: all very original, very
technological, with many followers, but in a few years have seen their stock sink to negligible levels. And, while it is premature to draw conclusions by similarities, there are already several interpretations of the market: are these technological companies really worth so much? Are they part of a slow and different bubble dot-com 2.0? Is the influence of its new competitor Amazon AMZN, after its purchase of Whole Foods WFM? Was not it more comfortable to continue as a private company?

Think that Blue Apron thought to leave to the market with an IPO of $ 17 ... excess of confidence?

Already since I wrote about Snapchat I expressed my doubts about these fashion technology companies, and more for intuitive reasons as I wrote there. Excessive optimism and overvaluation can play against them. Blue Apron, a company dedicated to the new item of programmed delivery of food kits to prepare and that only operates in the USA, is of almost family origin, its sales growth since its creation in 2012 was exponential, it uses sophisticated refrigeration systems, control of quality, packaging, shipping, all supported by advanced technology. As a concept, all very interesting, but the market seems to show another face: its distrust in these new ventures (or will it be the exhaustion of the model?). My reading is as follows: Wall Street often fixes a lot on the details, and therefore interpreted the tremendous downturn in its IPO price from $ 17 to $ 10 the attitude of a company too ambitious (or arrogant) that thought was very astute, until they made her 'step on land'. Sentiment trading, what they say ...

Personally I see it as a stock only for speculation, that is to say buy the dip when a technical indicator indicates me (as in these moments) or some brief dead cut bounce (temporary recovery after a long fall of the stock) also like in these moments, but never as a long-term investment. Too much risk as described above, in addition to belonging to a sector saturated and super regulated such as Health.

As an additional, this good report in The Motley Fools gives a better idea of ​​the history of Blue Apron and its projections -unicorn-to-pursue-an.aspx