Quick Takes on Timely U.S. Stocks in the Week Ahead
Brokers at Morgan Stanley and Goldman Sachs who can sweet-talk themselves into allocations from their banking colleagues’ have a hot IPO to discuss with clients this week.
Meal-kit provider Blue Apron on Wednesday is scheduled to go public as the latest so-called Unicorn company with a $1 billion valuation and no history in the stock market.
The offering’s lead underwriters — Goldman, Morgan Stanley (which also is a lender), Citigroup and Barclays — are talking big, and the small syndicate of banks with retail arms that are spreading the word to clients include RBC Capital Markets, SunTrust Robinson Humphrey, Needham & Co., Oppenheimer & Co., Raymond James and William Blair.
New York-based Blue Apron, to be sure, hasn’t earned a dime in profits and hasn’t given any indication of when it expects to operate in the black. It spent $144 million on marketing last year and another $60.7 million in this year’s first quarter, and its market debut comes in near tandem with the announcement of Amazon’s plan to buy Whole Foods, which could be a formidable competitor to the prepared-meal company, according to analysts.
If the Blue Apron IPO manages to price well and perform credibly in its opening days, it could bode well for the forthcoming debuts of other unicorns such as Uber, Pinterest and Airbnb.
U.S. stocks in general started the week positively, propelled by strong trends in the the housing market, where prices hit a record average high in May. Looming over that good news are questions about the volatile energy market. Though oil prices have rebounded a bit from their plunge earlier in June, they are poised by midweek for their steepest first-half drop in more than a decade.
In story-stock land, shares of Avis Budget Group surged more than 12% early Monday and were still up some 10% by noon on news that the car rental giant will manage Google parent Alphabet’s fleet of driverless cars.
U.S.-traded shares of Nestle held their own following weekend news of activist investor Daniel Loeb’s $3.5 billion position in the food company, and were up almost 5% at mid-day Monday.
Arconic, the spinoff of aluminum company Alcoa, was off more than 6% on media reports that it knowingly supplied flammable panels that have been blamed for the London Grenfell Tower fire last week that killed at least 79 people.