On Monday, as news of the Amazon service broke, Blue Apron's stock promptly fell to an all-time low of $6.45 within the trading day—down 35 percent from its $10 IPO price, and way below the company’s original proposed IPO range of $15 to $17 a share.
The financial firm Morgan Stanley, one of Snap’s lead investors, downgraded the stock and said the company was not innovating as fast as they expected.
In large part, this disconnect has to do with just a handful of investors agreeing on the value of a private company, says Brad Slingerlend, an investor who manages a technology fund for Janus Henderson Investors.
Nowadays, the overall stock market is at an all-time high—meaning, if it keeps rallying, investors stand to make plenty of profits—which should both encourage private companies to go public and investors to bet on stocks.
In the first six months of the year, according to data from the National Venture Capital Association, nearly 4000 companies received about $40 billion in financing—a pace near to, or set to surpass, the rate of investment in 2016.