It wasn’t by much, but Blue Apron stock hit the public markets at 10:29 a.m. on Thursday with a pop of as much as 9.8% in its first few minutes of trading.
The meal kit company first hit markets priced at $10 a share, which was in line with its issue price. But minutes after 11 a.m., the stock was trading at about $10.97 on the New York Stock Exchange under Blue Apron’s ticker “APRN,” giving the company a market capitalization of just above $2 billion. That’s also in line with Blue Apron’s valuation as a private company.
Still, it’s a sizable discount from what Blue Apron once sought from its IPO. When the company first filed, it sought a valuation closer to $3 billion, pricing shares between $15-$17. But investor enthusiasm for the first publicly traded meal kit company appeared to wane amid concerns about its steep marketing costs. Amazon’s decision to buy Whole Foods earlier this month also sent jitters through the grocery store space—which likely also put Blue Apron investors on edge.
By Wednesday, Blue Apron said it would sell shares at a price of between $10-$11.
Even with those steep marketing costs however, Blue Apron still appears to have trouble retaining its users. Venture capital firm Goodwater conducted a study of 2,600 meal kit users recently, finding that while 42% of Blue Apron users expect to use it more, 44% of users say they will use it less. In comparison, 64% of users said they would use Amazon Fresh more, while 47% plan to use HelloFresh more.
Still, Blue Apron’s IPO is coming on a rather weak day for markets in general. The S&P 500 is trading slightly in the red, or 0.35% down, while the Nasdaq is down 1%.