Blue Apron Holdings, Inc.
Lead Plaintiff Deadline: 12/01/2020
SUMMARY OF CASE:
A securities class action has been filed against Blue Apron Holdings, Inc. (APRN) on behalf of all persons other than Defendants who purchased or otherwise acquired Blue Apron securities pursuant and/or traceable to the Company’s initial public offering (“IPO”) on or about June 29, 2017. This case has been filed in the USDC – E.D.N.Y.
Blue Apron is a subscription-based,meal-kit delivery service founded in 2012. Blue Apron sends weekly boxes of pre-portioned ingredients with instructions for cooking meals at home. Blue Apron’s IPO was conducted pursuant to a registration statement (the “IPO Registration Statement”) and prospectus (the “IPO Prospectus”). In the IPO Registration Statement and the IPO Prospectus, Defendants made materially false and misleading statements regarding the Company’s business and its operational and compliance policies.
In addition, Defendants failed to disclose known material trends that would have a material impact on net sales or revenues or income from continuing operations,and that would cause reported financial information not to be necessarily indicative of future operating results.In particular, Defendants failed to disclose that by the time of the IPO: a.Blue Apron was experiencing adverse On-Time In-Full (“OTIF”) performance at its production facilities; b.significant delays had materialized in opening and ramping up production at its Linden, New Jersey facility; c.these adverse OTIF rates and delays were hindering the Company’s customer retention,and would necessarily delay the Company’s announced plans to add new products, which was essential to gaining new customers and competing effectively in the marketplace; and d.that as a result of these adverse OTIF rates and delays, Blue Apron had already decided it would be forced to change its strategic approach for the remainder of 2017 by reducing marketing spending until it could address these operational problems and improve its margins and OTIF rates.
On August 10, 2017, in connection with the release of its second quarter earnings, Blue Apron revealed it had encountered significant delays associated with ramping up production in its highly touted new factory in Linden, New Jersey. These pervasive equipment malfunctions and serious staffing issues at this new factory prevented Blue Apron from attaining full production capacity at the Linden facility, which was intended to generate more than half of Blue Apron’s total production.
These persistent production delays led to further delays in implementing new product initiatives that Blue Apron had hailed as crucial to customer growth and retention.Production delays also meant that the Company was forced to reduce the amount it spent on marketing,since it did not make sense to add new customers it could not service.Blue Apron also revealed in August 2017 that it was experiencing poor OTIF rates across its production locations, which threatened Blue Apron’s ability to attract and retain customers.8.Following this news, Blue Apron’s share price fell $1.10, or more than 17%, to close at $5.14 per share on August 10, 2017.9.Blue Apron’s stock price continued to slide into November2017,as additional disclosures revealed to the market the full extent of Blue Apron’s pre-existing ongoing production struggles,and the implications they had on Blue Apron’s business. By November 7, 2017, Blue Apron’s share price had fallen to $3.05, nearly 70%below the IPO prices.