Blue Apron Stock Fizzles on First Day of Trading

Blue Apron’s IPO was a lot less tasty than investors expected.

Despite being hyped as one of the most anticipated initial public offerings of 2017, the meal kit company failed to woo investors, ending its first day of trading at $ 10 a share. That’s the price at which underwriters priced the stock for its IPO. Shares however rose as high as $ 11 in trading on Thursday.

Now the company is valued at $ 1.9 billion — considerably below the $ 3 billion market capitalization it had once been projected to gain upon becoming public.

Not only does that suggest lower demand for the company’s stock, but it also cuts the company off from potential investors. Some funds are benchmarked off of mid-cap stocks — so companies in the range of $ 2 billion to $ 10 billion. At $ 1.9 billion however, Blue Apron would be technically be excluded from such funds.

Part of the reason for the weak IPO may be traced back to weak market conditions in general Thursday. Big tech stocks slid,m sending the Nasdaq down 1.4% and the S&P 500 down nearly 1%.

Making matters worse, the shadow of the Amazon-Whole Foods merger had already been a troubling piece of news for Blue Apron. But on Thursday, credit agency S&P gave the dangers it posed to the grocery industry even more weight. The S&P’s median one-year probability of default rose 30% to 4.85% by the start of this week, it noted in a blog post.

In short, Amazon’s push into the industry has raised concerns about grocery stores and their ability to pay back their debts.