This is Why Blue Apron Shares Surged This Week

Shares of meal delivery kit company Blue Apron Holdings Inc. were soaring higher this week. In fact, on Wednesday they surged the most since early in the pandemic.

The big move came after the subscription meal-kit company announced its plans to raise capital and eliminate shares with outsize voting power.

Blue Apron closed up 45% after the company announced the plan, which includes $78 million in fundraising.

The amount is equal to roughly 60% of Blue Apron’s current market value.

It was also revealed that co-founder and Chair Matthew Salzberg and director Barry Salzberg will also resign from the board.

The board of directors has appointed Jennifer Carr-Smith, an independent board member, to be board chair.

As part of the issuance plan, some holders agreed to convert their Class B shares and get ten votes each — into Class A shares that get only one vote. This triggered a provision that converts all outstanding Class B shares, the company said in a statement.

Known as super-voting shares, Blue Apron’s Class B shares were part of a controversial trend that awarded extra votes to company founders.

Blue Apron’s fundraising plan includes a $45 million rights offering and a pair of private placements as well.

The company plans to use the proceeds to accelerate its growth strategy, advance its sustainability goals, and increase wages and training for employees.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.