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

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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.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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