Normally hearing about a stock’s transformative process is an eye-rolling romp through a pile of buzzwords and weasel-speak. Today, however, it meant a whole lot of gains for Blue Apron (NASDAQ:APRN). Blue Apron’s internal transformation captured investors’ imaginations and left the stock up over 70% at one point in Friday afternoon’s trading.
So what did Blue Apron do to suddenly make its stock appreciate this hard? First, it paid off a lot of debt. Sure, the correct use of debt can be valuable to a company’s growth, but paying off debt removes expenses from the equation. With all its outstanding senior secured notes out of the picture, Blue Apron expects to be a lot more agile and focus on further cost-cutting.
Further, Blue Apron also noted it was moving to an “asset-light” model, transferring its fulfillment centers, equipment, and even personnel to FreshRealm instead. Meanwhile, Blue Apron got $25 million in exchange for the goods and know-how and is in line to double that figure once certain unspecified milestones are reached successfully.
A look at the last five trading days for Blue Apron shows that the news came at a good time. Blue Apron stock was moving gradually downhill for the last five days. It dropped to around $5 before shooting up to nearly twice that at one point in Friday’s trading.