One of the more interesting stocks making waves today is Blue Apron (NYSE:APRN). Up more than 20% at the time of this writing, APRN stock is once again drawing interest from a broad range of investors.
However, among the investor types that appear to be diving into this name are speculators. Blue Apron is a company with a relatively high short interest ratio and borrow fee rate. Alongside a low price-per-share, these are the integral ingredients that speculators look for in potential short-squeeze opportunities.
That said, in order for any sort of short squeeze to materialize, there needs to be a catalyst. Today’s announcement from Blue Apron — that the company will move to an asset-light model — appears to be providing the gasoline for this fire. Let’s dive into whether the momentum can rage on from here.
Is APRN Stock a Short Squeeze Bet Worth Making?
Blue Apron’s announcement today is quite in-depth. Essentially, the direct-to-consumer food planning company plans to transfer ownership of its operational infrastructure to FreshRealm in exchange for $50 million. The company will then outsource the logistics of its meal kit business, allowing for a greater focus on marketing, product design, customer support and consumer technology.
Blue Apron President and CEO Linda Findley noted the following in the announcement:
“Over a decade ago, Blue Apron pioneered the U.S. meal kit industry and remains a leader in offering delicious, chef-curated meals to thousands of customers every week. As we continue to evolve, we believe there is an opportunity to simplify our direct role in the fulfillment of our product, allowing us to focus on growing our brand, our customer base and revenue in the long-term.”
Overall, investors appear to like this move, given the strength of the company’s brand and its relatively established customer base.
Ultimately, we’ll have to see if this new direction translates into improved profitability metrics for the company. That will be determined over time. Still, investors and speculators alike have a catalyst to jump on today to buy this beaten-down stock. Accordingly, APRN stock is worth keeping on the watch list right now.
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On the date of publication, Chris MacDonald did not hold (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.
