Amazon just launched a meal kit service and Blue Apron is dealing with the consequences.
On Tuesday, Amazon Fresh launched its meal kit service. Kits, which contain enough ingredients to prepare meals for two to four people, cost between $US19.99 and $US38.
The news comes less than a month after Blue Apron’s disappointing late-June IPO. Since going public, Blue Apron has been swamped by bad news — thanks in large part to Amazon.
When Amazon filed a trademark application on July 6 for “prepared food kits,” Blue Apron’s stock sank 11%.
On Tuesday, Blue Apron stock dropped 5.3% as of 11:35 a.m. ET. It now sits at 38% below its IPO price of $US10 a share.
Amazon started causing issues for Blue Apron before the company even went public. Blue Apron dropped its IPO range to $US10 to $US11 a share, down from $US15 to $US17, after Amazon announced its acquisition of Whole Foods.
Still, some investors say that Blue Apron still has a long way to fall. In the company’s first Wall Street analyst rating, Chuck Cerankosky of Northcoast Research gave the company a price target of just $US2.