Blue Apron's shares rose in their debut following the meal-kit delivery company's watered down IPO. Fred Katayama reports.
Blue Apron's stocks rose in its debut on the New York Stock Exchange. At one point, the stock of the meal-kit delivery company touched a $11 dollar mark. It gave it a market capitalization of about $2 billion. The 30-million share offering was priced at $10 per share on Wednesday afternoon, after Blue Apron slashed its valuation expectations by a third. The valuation cut came on worries about competition from Amazon. Amazon recently bought Whole Foods and also operates a small meal- kit service business. Renaissance Capital's Kathy Smith says, Blue Apron has to focus on long-term value. (SOUNDBITE) KATHLEEN SMITH, PRINCIPAL, RENAISSANCE CAPITAL, MANAGER OF IPO-FOCUSED ETFS (EXCHANGE TRADED FUNDS) (ENGLISH) SAYING: "For this company, the issue is the next couple quarters. Are we gonna see them fulfill the expectations of IPO investors to show growth on the path to profitability?" Some analysts say Blue Apron's stock is still over-valued. The company hasn't turned profit yet, its marketing costs skyrocketed, and it has had trouble retaining customers. According to Blue Apron's IPO filing, 90 percent of the meal-kit delivery service's customers abandon it within a year of first purchase.