Ran into a nice case study about Blue Apron.

Growing competition and Amazon have crushed the stock but bigger concerns are

as follows.

  1. Blue Apron is not an essential. You life will not change without Blue Apron. You will just cook at home or go eat outside. In contrast, if Google, Facebook, or Amazon disappeared, your life will be very different.
  2. Marketing expense out of control. It is so expensive to acquire customers. Well, because we have so many alternatives. I have an In-N-OUT in walking distance!!
  3. Complex operations. It is so hard to run a fresh food delivery business. You need be aware of spoilage, lack of availability, price spikes and more….Yeah, this is not an easy business to run.

So what will happen to Blue Apron?

I believe that they will be acquired and bundled. The likely acquirer? Probably not Amazon unless it is very cheap. But I could see Walmart acquiring Blue Apron and somehow combine with Jet.com and use its super logistics to gain some customers that they don’t have access to.

But! Again, everything is about price. Any acquirer knows that Blue Apron is suffering and will wait until the last moment to move.

So what should we do? I am not good at shorting but if someone knows how to short well, this one would be a good stock to short.

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