The lackluster stock market debuts of social media company Snap and meal-kit delivery service Blue Apron have splashed a dose of cold water on an initial public offering season that appeared to be heating up.
The two companies share several similarities. Both are closely watched upstarts that showed genuine promise for disrupting in their respective industries and making a name for themselves in a new category of business. Both are beginning to face a serious response from potential rivals. Both had yet to report regular profits.
The result has become a cautionary tale in an otherwise red-hot stock market, a lesson for a host of technology and commercial darlings that have been lining up for their day on the public markets. Bay Area names like file-hosting service Dropbox, digital media player Roku and subscription fashion service Stitch Fix have all signaled their interest in going public, part of a wave of IPOs that may one day include the likes of Airbnb and Uber.
After Snap had its IPO in March with an opening price of $17, it saw its shares close at a low of $12.52 on Wednesday, the same day Facebook reported that users under the age of 25 spend an average of 32 minutes a day on its Instagram app, demonstrating its success with a demographic Snapchat heavily targets. Snapchat released similar data in February when it originally filed its IPO. Some analysts said Snap’s shares could fall farther when a lockup period ends that currently bars insiders from selling.
Blue Apron initially priced its shares in June at around $10 a share; by Wednesday, the stock had closed at $6.25, off more than 30 percent from its original price (which itself was lower than the company had hoped). The meal-delivery service was a victim of unfortunate timing. It went public shortly after Amazon.com announced its purchase of Whole Foods, leading to speculation the online retailer might accelerate its own…