After a difficult month in which shares have lost 40%, Blue Apron (NYSE:APRN) finally has some good news to report. In a statement released this morning, the company confirmed a funding update regarding affiliates of Joseph Sanberg. According to the update, Blue Apron has begun to receive the funds promised as part of a private placement obligation. As the company reports:
“Blue Apron received $1.0 million of the private placement obligation of $56.5 million in exchange for which the company will issue 176,991 shares of Class A common stock at a price of $5.65 per share.”
APRN stock immediately rose today on the news, surging 10%. While it has since pared those gains, it looks primed to rise even higher.
What’s Happening with APRN Stock
This news comes at an excellent time for Blue Apron. Despite some growth this week, the company has spent 2022 in a state of decline, losing over 90% of its value. This is highly discouraging for experts who have flagged it among stocks to sell due to its questionable financials and consumer concentration risk. And while APRN stock has been hailed as a likely short squeeze candidate, the short interest clearly hasn’t been high enough.
If today’s performance is any indication, though, this funding update may mark a turnaround. At the very least, the influx of cash will likely give the stock some room to run. It’s presently unclear how the issuing of new shares will affect APRN stock. However, Sanberg and his affiliates clearly believe it will ultimately benefit the company.
According to Blue Apron, Sanberg and his affiliates are still committed to funding the remainder of the private placement obligation, currently $55.5 million at $5.65 per share. Blue Apron has issued no further statements on its plans for growth as the company moves forward.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.