The last time I wrote about embattled meal-kit service Blue Apron (NYSE:APRN), I took a surprisingly optimistic view. Despite the ugliness in Blue Apron stock — it’s one of the most disappointing initial public offerings ever — I felt that the underlying company had some catalysts to advantage.
But from a practicality standpoint, the issue has always been market volatility.
Within a span of just over a month, I was both right and wrong on APRN stock. Immediately after my contrarian take, shares tumbled badly, making me want to hide underneath my desk in shame. However, weeks later, APRN shot to the moon.
Where do we stand now? Unfortunately, we’re pretty much back to square one. That said, the meal service generated headlines that had a massive impact on Blue Apron stock.
In an abrupt but not entirely unexpected announcement, management disclosed that CEO Brad Dickerson left their ranks. Coming into replace Dickerson is Linda Findley Kozlowski, who previously served as COO of Etsy (NASDAQ:ETSY). While APRN stock dropped during regular hours, shares gained nearly 16% in extended trading.
Leadership Change Provides Credibility for Blue Apron stock
The announcement comes at a particularly important time for the organization, and for stakeholders of APRN stock. Using January’s dramatic surge in valuation as evidence, Blue Apron has potential for a meaningful recovery. More importantly, Wall Street believes it too, so long as the driving narrative is credible.
And that’s exactly what Kozlowski brings to the table. A veteran executive, she specializes in e-commerce and consumer-focused businesses. Such expertise is vital given that Blue Apron stock has colossal competition. One of the company’s rivals is Amazon (NASDAQ:AMZN), an organization that thrives on disrupting other industries.
Additionally, Kozlowski can point to Etsy’s market success as a lesson in contrast. Since its IPO, Etsy shares have more than quadrupled in value. On the flipside, Blue Apron stock lost 90%.
Moreover, Etsy doesn’t immediately strike you as a compelling opportunity. The company specializes in handmade or vintage items, hardly emblematic of today’s highly-digitalized world. Yet ETSY has smoked most of its publicly-traded competition. Therefore, it’s not out of the question that Kozlowski could redirect APRN stock to profitability.
While I wouldn’t necessarily chase shares based on this executive-level announcement, the meal service has a chance for a rebound.
APRN Must Pull the Demographic Levers
Curiously, one of the biggest mistakes that now former CEO Dickerson made was focusing on the older, affluent crowd. At first glance, this doesn’t sound like a mistake. In almost every other industry, old money wins out.
But when it comes to food, zeroing in on retirees is actually short-sighted. Baby boomers are on their way out. Millennials are on their way in. Age isn’t the only factor that separates them. Culturally, these two demographics have different expectations and desires.
For example, an American rite of passage traditionally involved attaining a vehicle. But with millennials, they’re just not as interested in cars as prior generations, resulting in fewer auto sales. The rise of ride-booking apps like Uber has only exacerbated this trend.
So what are millennials interested in spending on? Wining and dining. Food-delivery statistics confirm this dynamic. Although many millennials are laden with student loans and a tough job market, they place a premium on culinary experiences — likely because treating yourself to a nice meal occasionally is far cheaper than a house or a car.
That’s where Kozlowski can make a notable difference for Blue Apron stock. Instead of focusing just on raw numbers, she can tap into what the emergent generations want. It’s clear that millennials are interested in culinary experiences, and while meal services’ high prices may be prohibitive for some younger adults, those who can afford to pay for them are willing to. Thus, a few critical tweaks could make Blue Apron great again.
APRN Stock a Risky But Rational Play
Conservative investors shouldn’t get too excited about APRN stock. It is still a risky trade, and the underlying company has much to prove.
But if you have tolerance to high-risk opportunities, you might want to consider Blue Apron stock. The organization requires a fresh strategy and execution. It’s not an easy road ahead, but at least one leg of the recovery narrative has been checked off.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.