Things have been looking a bit more difficult for food delivery startup Blue Apron. After months of facing concerns that its competitive future may be limited now that Amazon has officially entered its space, now it has been hit by a lawsuit from a disgruntled investor who claims the firm knowingly and intentionally misled him and its other investors.
Said shareholder, Ahmed Chaudhry, has alleged the firm made “misleading” and “untrue statements” in its filing with the Securities and Exchange Commission leading up to its public offering.
The suit also goes after the investors and lenders who underwrote Blue Apron’s IPO — Goldman Sachs, Morgan Stanley, Citigroup Global, and Barclays Capital. The suit is filed for any and all purchasers of class A Common stock in the firm.
Specifically at issue: the suit claims Blue Apron failed to disclose delays to a new factory being constructed (which delayed new product roll-outs) and that it had already decided to lower its advertising budget by the second month of 2017. The suit also alleges that Blue Apron execs knew of Amazon’s coming competition and that it had serious issues getting ingredients straight and meals delivered on time.
Blue Apron has acknowledged the delays on its New Jersey fulfillment center, but will be defending itself in the suit (presumably denying the rest of the accusations).