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Blue Apron Faces Shareholder Lawsuits

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Less than two months after its debut on the New York Stock Exchange, embattled meal-kit delivery company Blue Apron Holdings Inc. (APRN) has been hit with multiple shareholder lawsuits for its "misleading" and "untrue" statements in its IPO prospectus.

The various lawsuits mirror each other in their allegations against Blue Apron, its CEO, CFO, directors and the underwriters of its IPO.

According to the various complaints filed against Blue Apron, the company did not disclose that it was experiencing delays at its new factory in Linden, New Jersey, which would force it to delay new product roll-outs.

In addition, Blue Apron is alleged to have already decided to reduce advertising expenditures in the second quarter of 2017, which would hurt sales and profit margins in future quarters.

Further, Blue Apron was aware of Amazon.com Inc.'s (AMZN) plans to enter the meal-delivery business and it was also experiencing issues delivering meals to customers on time.

According to the complaints, Blue Apron investors suffered damages after the true details of the company's struggles hit the market.

A shareholder class action lawsuit filed by the law of Kessler Topaz Meltzer & Check LLP alleges that on August 10, 2017, Blue Apron shocked the stock market by announcing significant undisclosed problems, lowering its guidance for the second half of 2017, and stating that it planned to change its strategic approach for managing the business for the remainder of 2017.

After debuting in June at $10 per share, Blue Apron's stock price has fallen by almost half. In addition, certain of the IPO underwriters have reduced their target price for the stock.

Activist investor Jana Partners disclosed in a regulatory filing last week that it has acquired a 2 percent stake in Blue Apron, signaling it may take on the company. The acquired stake is worth about $5.6 million.

Jana Partners also said it holds 23.27 million shares in grocery chain Whole Foods Market Inc., which was acquired by Amazon.com for $13.7 billion.

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