Blue Apron's stock soars as restaurants close because of coronavirus
Struggling meal-kit company Blue Apron is getting a boost as more Americans stay home to dodge the coronavirus. With restaurants closed for dine-in service and grocery store shelves depleted of certain staples, the company's stock soared nearly 200% on Wednesday as the rest of the market was sliding.
Although the shares gave back some of those gains on Thursday, they're still up 164% over the last month.
The same virus that is decimating the restaurant industry is forcing many Americans to prepare their own meals. That means cooking at home, with health experts urging people to stay inside to help contain the coronavirus.
"Over the last week we have seen a sharp increase in consumer demand," Blue Apron CEO Linda Findley Kozlowski said in a statement to CBS MoneyWatch. She added that the company is hiring more workers — including those recently laid off by restaurants — to meet the increased demand for its services.
When Blue Apron went public in 2017, investors valued the company at nearly $2 billion amid growing consumer interest in subscription services that deliver meal ingredients to be assembled for cooking and plating at the home or office. But Blue Apron shares, which topped $60 the following year, ultimately was forced into executing a "reverse split" in 2019 to support its by-then-sagging stock price. A reverse split means investors get fewer shares at a higher per-share value.
Blue Apron reported a loss last year of $61 million on $455 million in revenue. The company did not return a request for comment Thursday.
Blue Apron members choose meals from a set menu. Cooking instructions and pre-measured ingredients are then delivered to customers' doors. A two-person, two-recipe per week meal plan costs $47.95. A four-person, four-recipe per week subscription costs $119.84 per week, according to Blue Apron's website. Wine can also be delivered with meals for $10 per bottle.