Blue Apron (APRN) drops below $1

• Blue Apron officially became a penny stock on Tuesday. Its shares closed down 11 pennies, to 90 cents, as the stock extended a long, steady post-IPO slide.
• The slide arguably started with the June 2017 IPO itself; at $10 a share, the deal priced lower than first anticipated.

Blue Apron’s (APRN) public experience gives investors something to contemplate as they look forward to a 2019 IPO lineup that could include big names like Uber, Lyft, Airbnb and Slack Technologies.

The company has been under attack on several fronts. Its subscription and delivery model offers appealing characteristics—and many who tried it loved it, or at least liked it—but acquiring and retaining customers proved to be a costly business for Blue Apron.

Those costs are even more problematic when you’re in a competitive industry—and Blue Apron certainly is, with companies such as HelloFresh (HFG.Germany), Albertson’s-owned Plated and Kroger -owned (KR) Home Chef—vying for many of same consumers and, often, doing so with comparable strategies.

In Blue Apron’s case, meanwhile, it’s not only dealing with an evolving meal-kit delivery business but also a fast-moving food industry in which grocery delivery is competing for some of those same dollars.

Is all lost for Blue Apron? In mid-November, with the shares in the neighborhood of a buck and a quarter, management announced a plan to get to profitability next year by focusing on their best customers, finding new sales channels, improving efficiency, and cutting staff.

Investors, for now, don’t seem to be giving the company much credit for that—though Wall Street’s average price target on the stock is near $1.60. Some degree of optimism may be associated with the possibility of a buyout by a company that likes the Blue Apron brand.

The biggest takeaway for IPO-minded investors might be a simple reminder that private valuations are far from a sure indicator of what the public markets might bear. In Blue Apron’s last private round, it was valued at about $2 billion. The company is worth less than a 10th of that now.