Blue Apron takes off; urban-gro and Hydrofarm fly high; Dada, AppHarvest and Agrify take a breather

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

The winning streak continues for FFF’s listed FoodTech space.  The week ended Friday 03 February 2023 saw 31 risers, 17 fallers and one non-mover.  That means there have now been four ‘Up’ weeks (where share price risers outnumber fallers) and one ‘Honours even’ week (24 risers and 24 fallers) since the turn of the year.  Is this the work of the January Effect - “As goes January, so goes the year”? Only time will tell…

Another week, another stock potentially benefiting from a short squeeze – when short sellers scramble for stock to close out positions.  The stock under the microscope this week is Blue Apron (APRN) - shares put on 24% to close at US$1.20 per share.  The meal kit co. is now up 70% from the US$0.709 level it was trading at less than a month ago.   Such a quantum of gain over such a short period of time is usually reserved for takeover approaches or forecast-busting results.  No sign of either of those here, at least not yet.  Indeed, no press releases at all from Blue Apron in 2023.   

Short-squeeze candidate then? The Street.com seems to thinks so: “Blue Apron's shares…now trade at around $1. The company has suffered from rising costs, pushing the prospect of generating a profit further and further away. Blue Apron also issued about $15 million in equity, diluting its float and attracting a lot of skepticism from the market. Currently, about 40% of its float is being shorted.”  But for a short squeeze to take place, a trigger is typically required.  Well, take your pick: 23 December 2022 press release ‘Blue Apron Announces Receipt of Continued Listing Standard Notice from NYSE’; 15 December 2022 press release ‘Blue Apron Provides Update on Sanberg Funding’.

Elsewhere, a good week for indoor agriculture/cannabis solutions duo urban-gro (UGRO) and Hydrofarm (HYFM) - up 21% and 19% respectively.  UG(R)O first: the shares have been flying high (up 50%) ever since 9 January when the company “…reported record backlog entering its 2023 fiscal year and reaffirmed its financial guidance for fourth quarter 2022.”

Similar story at HYFM: on 09 January, the shares were exchanging hands for US$1.23 a pop, less than a month later on Friday 3 February, they closed at US$2.20. No press release from the company but there was one from Nasdaq on 1 February: “BlackRock Increases Position in Hydrofarm Holdings Group (HYFM)”.  According to the announcement: “BlackRock has filed a 13G/A form with the SEC disclosing ownership of 2.79MM shares of Hydrofarm Holdings Group Inc (HYFM). This represents 6.2% of the company.”  Back in Feb 2022, BlackRock declared an interest of 5.40% in HYFM.  Feb 2022 - tick. Feb 2023 - tick. Feb 2024?  Tune in next year to see if BlackRock increasing its stake in HYFM is an annual post-Christmas thing.

Among the fallers, profit-taking appears to have been plat du jour for the likes of China's on-demand delivery/retailer platform Dada Nexus (DADA) - down 15%; vertical farmer AppHarvest (APPH) - down 11%; and indoor agriculture/cannabis solutions provider Agrify (AGFY) - down 7%.  Despite the share price weakness, DADA and APPH are still up threefold or so over the last three months, while AGFY is up ‘only’ 1.4 times since mid-December.  No need to feel too sorry for the trio then…