Blue Apron Faces a Lawsuit From Angry Investors

They claim the company failed to mention it was struggling.

Blue Apron CEO Matt Salzberg, center, poses with fellow company co-founders Ilia Papas, left, and Matt Wadiak outside the New York Stock Exchange before the IPO begins trading on June 29.Richard Drew/AP

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

Blue Apron is being sued by at least as many law firms as pounds of ice packs it sends in a box.

At least a dozen firms have filed class-action suits against the meal-kit company for failing to disclose pertinent information at its initial public offering in June. The suits allege that the company—which delivers ingredients and cooking instructions to customers’ homes—failed to tell shareholders that it had reduced spending on advertising, was losing customers due to delayed or incomplete orders, and was struggling with bringing its new fulfillment center in Linden, New Jersey, up to speed.

It’s a tale as old as time: if the stock drops, sue. Blue Apron’s share price has fallen nearly 50 percent from when it went public on June 29. “As soon as the stock goes down like that, the lawyers come out,” IPO expert Kathleen Smith told TechCrunch, adding that cases like these are hard to prove and usually get settled out of court.

This isn’t the only fish Blue Apron’s gotta fry. The company has laid off 14 recruiters and implemented a partial hiring freeze. Last month, a former employee sued the company for allegedly violating the Family and Medical Leave Act. And it’s still handling PR issues over environmental concerns with its business model—the enormous boxes and individually wrapped ingredients, the aforementioned ice packs—as well as concerns with worker health and safety at its fulfillment centers. Plus, it’s got a potential rival on the horizon: Delivery behemoth Amazon intends to buy Whole Foods, which, as one journalist put it, would give Amazon “431 upper-income, prime-location distribution nodes for everything it does”—including food delivery.


Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend