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Data Suggest More Trouble Ahead for Blue Apron

Sources: Second Measure and SEC filings. Charts by Mike Sullivan.

The looming Amazon-Whole Foods merger might not be Blue Apron’s biggest problem.

The meal-kit provider is on track to see declines in sales and customers in the second quarter, according to credit card transaction data compiled by research firm Second Measure. The data might help explain why investors have heavily bet against Blue Apron’s stock in advance of its announcement of second-quarter results on Aug. 10.

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Because of the strong demand and limited supply of Blue Apron stock for short sales, investors are borrowing at annual interest rates of more than 60% to short the stock. Supply for short sales will be limited until more shares become available for trading in the fall. That also means that any further drop in the stock price until then will be because of long shareholders selling their positions, said Ihor Dusaniwsky, head of research at S3 Partners.

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New customers are proving harder to hold onto and less valuable, while older, more valuable customers spend less money over time.