Is Blue Apron cooked? I think so. Here’s my take on $APRN (March 19, 2020)
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I have been scratching my head over Blue Apron ( NYSE: APRN ) for a while. I get it as far as why the stock is under pressure from the buying side because people can’t get food. I always thought this was a screaming short and I was right. I am certainty not the only one who felt that.
Think about it, this company has no monopoly on anything, literally, anything. It is nothing, you put a bunch of sprigs and sprouts and a little thimble of pepper and this and that in with a chicken breast and send it to somebody with a recipe and then cook it themselves. That’s fine on date night when you can’t go out but it has limited efficacy, particularly when people will just keep the recipes and then go to the supermarket themselves and buy the stuff.
The bottom line is, this is a business, that in my view, the only reason it went public, it got to go public so the early investors could unload their shares off of these unsuspecting idiotic bag holders who really thought Blue Apron ( NYSE: APRN ) would be a cool thing to own.
So the same guys that bought here are probably the guys that are buying here. Because here’s the hard truth: it’s really the ugly truth. Blue Apron ( NYSE: APRN ) is increasing their capacity and they are hiring workers to meet Coronavirus related demand. Whoopty do. If you can’t get food then your food delivery business kind of sucks. It is kind of like GrubHub ( NYSE: GRUB ) or DoorDash, they deliver food to your door in a dash. BUT I am not saying this the case with them, I am not going there I am just using an analogy.
If this is what they do and you want food, you have to call those guys and say, “Hey, dash over to my door and bring my grub. I’m ready to go.” And then the company says, “Well, none of the restaurants are open, we don’t really have anything for you. You don’t curse them out you just don’t pay them. You say okay, no problem.
That is what I look at here. I don’t see people chowing down on all these Blue Apron ( NYSE: APRN ) meals if Blue Apron ( NYSE: APRN ) is having a hard time procuring the actual food. But also beyond that, I don’t see this being something where that during the Coronavirus; during this whole Coronavirus thing I don’t really see people that are getting Blue Apron ( NYSE: APRN ) going after the fact.
After things have calmed down and you can actually buy Moon Floss in the grocery store instead of having to ration it on those little tiny squares. After you can go back to doing that I just don’t see people saying, “Screw the supermarket I like that Blue Apron ( NYSE: APRN ) thing. I am just going to keep that stuff going.” No. I don’t see it.
The stock was literally at $2.00, $2.00 and change just a few weeks ago. Now it is up at $20.00, $25.00 at one point. This is just stupid. This is a temporary blip. This is a feeding frenzy and most likely due to short covering; the bottom line is this: This stock should not be where it is. It shouldn’t even be close to where it is. This stock should be a $3.00 stock.
I am not Andrew Left at Citron calling a valuation. I am just saying, this is a stock that went up bigly. It went too far; now even after hours I see that this thing is down by a lot. So the thing ran up first thing in the morning. I am going to venture a guess and I think I got it on this one. The stock will never see this height again. The stock will never get up to this level. That is something I would bet a lot of money on. But I will take you up on it if you want to reach out to me. I just don’t see it.
If you are long this stock; I’m not sure I would short a stock like this because this is known as the stupidity pattern. It is literally like, what are you people thinking? It is just a real nuts pattern and so anything could happen. Similar to the way Tesla ( NASDAQ: TSLA ) traded. At one point it was at 200.00 and then less than a year later it is up at 985.00 or so. Like what’s the deal? Why? These stocks make these weird insane moves and this would be one of them here.
If you happen to be one of the bag holders that bought this thing ( NYSE: APRN ), $23.00, $24.00, $25.00, $30.00 I will tell you this: It’s not too late to sell at 14.70. I think you shouldn’t have bought it in the first place or you should have flipped out of it by now, whatever. But I think if you are selling this stock even here at $15.00, 14.70, in two or three months you are going to look back at that and say, you know what? That was actually a pretty good loss I’ll take it.
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