Snap, Blue Apron fuel worries about overheated IPOs

From Reuters - August 10, 2017

NEW YORK/SAN FRANCISCO (Reuters) - Snap Inc and Blue Apron Holdings Inc's dismal quarterly reports on Thursday, which sent their shares slumping, join a growing list of technology startups failing to live up to sky-high expectations set ahead of their initial public offerings.

There are growing concerns in Silicon Valley that the dominance of Alphabet Inc's Google, Facebook Inc, Apple Inc and Inc are beginning to squeeze the life out of the startup economy, and even large would-be challengers, including Snap and Twitter Inc, are struggling to maintain growth.

Snap, the owner of Snapchat, dropped 17 percent in extended trade after its second quarterly report as a publicly listed company missed Wall Street's estimates and added to fears the social media company is succumbing to competition from Facebook.

Earlier, Blue Apron lost nearly a fifth of its value after the meal-kit delivery company's first quarterly results following its June IPO also missed estimates and compounded worries that will eat its lunch.

Snap's $3.4 billion IPO five months ago was the largest by a U.S. technology company in three years, despite concerns about slowing user growth and a warning by the company that it might never become profitable. Facebook's Instagram has since launched features copying popular features from Snap. Inc registered a trademark for a similar meal-kit service last month, heralding even more competition to come for Blue Apron, which already competes with dozens of startups.That move, along with Amazon's industry-altering deal to buy upscale grocer Whole Foods Market Inc, has weighed on Blue Apron's shares since their market debut.


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