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Blue Apron IPO - the problem may Not be Amazon.com Inc, but closer to home

Proactive Investors Tuesday, 20 June 2017 ()
Okay the word of the day Monday was ‘really’ and summed up the reaction of analysts and investors to the planned IPO of Blue Apron Holdings Inc, the meal ingredients company. A number of seasoned market watchers were a little incredulous at the move, coming as it did less than three days after Amazon.com Inc’s (NASDAQ:AMZN) US$13.7bn move for Whole Foods Markets (NADAQ:WFM) – and the coverage has largely mirrored that scepticism. READ: Tech Crunch gives its insight on the Blue Apron IPO It is assumed that Amazon, with its newly-acquired footprint in the grocery space, will stomp on newbies such as Blue Apron. However, the company’s advisers don’t seem to be particularly perturbed. Either this or they’ve decided simply to go hard rather than go home, as it were. The IPO could give the business a US$3.2bn valuation, around US$1.2bn higher than the firm was worth in private ownership. It will issue shares at US$15-$17 each, raising around US$590mln in the process. But while most of Wall Street was looking at the looming juggernaut that is Amazon, one keen-eyed amateur analyst seems to have spotted a more pressing problem for the business. His/her Twitter handle is Modest Proposal points to an alarming increase in churn despite a punchy cost per gross addition (we are not reporting this as fact; it is merely an observation).   Blue Apron updated S-1. Using disclosed average CPGA of $94, monthly churn has risen from 7% to 18%, implying 5.5 mo avg customer life. pic.twitter.com/m25VCSzhVd — modest proposal (@modestproposal1) June 19, 2017
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Source: Bloomberg Technology - < > Embed

News video: What Amazon's Whole Foods Deal Means for Wal-Mart

What Amazon's Whole Foods Deal Means for Wal-Mart 02:07

Jun.19 -- Bill Simon, former chief executive officer at Wal-Mart U.S., discusses how Amazon.com Inc.'s $13.7 billion acquisition of Whole Foods Market Inc. may impact Wal-Mart and looks at Amazon's ability to cut food prices. He speaks on "Bloomberg Surveillance."

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Twitter

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Ephraim Alajaji @tweeinstein My wife and I get blue apron and have for two years and we've never had a problem with it. We absolutely love it. 2 days ago

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Kevin Reichard @danprimack All about providing last mile service at a profit. Amazon solved it; Blue Apron losing a ton. Last mile… https://t.co/mvk32yUpQr 2 days ago

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Dan McCarthy Customer-based corporate valuation (on Blue Apron) makes it into TheSpoon! https://t.co/4Yz0C9d4ko #CBCV 2 days ago

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mole_ebooks BLUE APRON, SOLVING THE PROBLEM: 6 days ago

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lesliecarothers RT @TheSpoonTech: Blue Apron’s Biggest Problem Pre-IPO? Finding Loyal Customers https://t.co/Drax6Qc78z via @TheSpoonTech #foodtech #foodde… 1 week ago

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The Spoon RT @SmartKitchenCon: What is Blue Apron’s Biggest Problem Pre-IPO? Finding Loyal Customers. More via @TheSpoonTech https://t.co/bNSxTfPRhV… 1 week ago

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