Meal kit provider Blue Apron Holdings Inc (NYSE:APRN) was a rare riser in a falling market on its market debut on Thursday.
The shares were trading around 1% above the US$10 price at which the shares were floated in a market that is down about 0.8% but management is unlikely to be cracking open a bottle of champagne to accompany a carefully selected box of food ingredients, because it had hoped to float the company at anywhere between US$15 to US$17.
READ Meal kit outfit Blue Apron makes market debut with shares at issue price
That indicative price range was cut to US$10 to US$11, with the company’s financial advisors eventually plumping for a figure right at the bottom of that range, which at least spared the company the ignominy of falling flatter than a pancake (ingredients: flour, egg, milk, some cooking oil and a pinch of salt) on its first day as a public company.
The do-it-yourself meal-kit delivery firm, founded in 2012, is the biggest in the US and the first to go public, bit it has yet to make a profit.
Its own prospectus admits that competition in food sales, especially in the food delivery area in which it operates, is expected to increase.
The recent takeover approach to Whole Foods Market Inc (NASDAQ:WFM) by online retail leviathan Amazon.com Inc (NASDAQ:AMZN) hinted heavily that the competition may well come from Amazon, which probably explained the decision to cut the flotation price.
In an interview on business network CNBC Blue Apron’s chief executive Matt Salzberg chose to describe Amazon’s decision as a validation of the food kit delivery model, rather than a threat, but then he had little option but to say that.
“The stock price today, whether it’s up, down, left or right, is really just the beginning of this new chapter in our company’s life that we are really excited about,” Salzberg said.