A good number of high-profile IPOs have a brief honeymoon on Wall Street where the stock trades notably higher. Then, the numbers roll in, and either that honeymoon lasts, and the stock jumps, or it doesn’t, and the stock drops.

Meal kit maker Blue Apron Holdings Inc (NYSE:APRN), though, didn’t even get a brief honeymoon. APRN went public at $10 per share, and it hasn’t been higher since.

Today, APRN stock trades at $2.60.

Why the big drop? Blue Apron is in a hyper-competitive space, and it hasn’t been able to distinguish itself from the pack in that crowded space. In fact, Blue Apron has actually let the competition pass it by, and the company’s operations, revenues and customer base are now all shrinking.

It is worth noting, however, that Blue Apron stock has jumped more than 40% over the past several weeks from $1.80 to $2.60. That rally is largely the result of a positive shout-out from Kevin O’Leary, who thinks the company will be acquired, and better-than-expected first quarter numbers that showed improving profitability.

But O’Leary himself admits the acquisition thesis is pure speculation, while APRN still runs a sizable loss on a shrinking revenue base.

Consequently, I say fade this rally in APRN stock. This is a company that could very well go to zero.

Here’s a deeper look.

Blue Apron Has Too Much Competition

Since day one, the biggest concern regarding Blue Apron is that the company simply has too much competition and not enough scale to compete with that competition.

This problem has only gotten worse.

Namely, the whole on-demand food market is moving toward delivery. Companies like GrubHub Inc (NYSE:GRUB), UberEats and DoorDash are now partnering with restaurants of all sorts.

That means that they have delivery partnerships with not just fast-casual chains like McDonald’s Corporation (NYSE:MCD), but also with more healthy, sit-down, home-cooked-feel restaurants, too.

Thus, meal kits are designed for the segment of the market that still wants to cook food but doesn’t have time to shop for groceries. This segment seems awfully small. If you value cooking, you will likely make time to go to the grocery store and pick out your own ingredients. If you value time, you will likely just order from a healthy restaurant through UberEats or GrubHub.

Thus, this overlap of somewhat valuing time and somewhat valuing cooking and health seems to be greatly limited in scope.

Within that limited market, competition is also very fierce. Amazon.com, Inc. (NASDAQ:AMZN) has meal kits. Weight Watchers International, Inc. (NYSE:WTW) just jumped into the meal kit category, too. Of course, there is still market leader HelloFresh, who just announced 50% revenue growth and 40% customer growth last year.

By comparison, last quarter, Blue Apron reported a 24% decline in revenues and a 20% decline in customers.

The Clock Is Ticking on Blue Apron Stock

Overall, not only is Blue Apron stuck in a lousy and shrinking market, but it is also rapidly losing share in that shrinking market.

Granted, the revenue and customer declines are the result of less marketing spend, so overall profitability is rising. But the company still runs sizable losses, and the prospects of near-term profitability are bleak considering expenses have already been axed, and revenue growth trends remain weak.

The biggest problem is that APRN only has $203 million in cash on the balance sheet, while net cash flows have been consistently negative. Unless there is some dramatic turn in the business, that cash balance will continue to dwindle, and Blue Apron stock will head lower.

The only chance of survival is acquisition. But I’m not sure who would want to buy APRN stock.

The company clearly doesn’t have many loyal customers, as a decrease in marketing spend has directly correlated to a decrease in customer base. Revenues are dropping. The company isn’t profitable, nor is it the biggest in its space. The market’s long-term growth prospects are also questionable given a rise in on-demand food ordering and delivery apps.

Bottom Line on APRN Stock

Unless this company gets acquired, APRN stock will keep falling.

I don’t see an acquisition happening given APRN’s shrinking importance in a not-that-important category of the food market. As such, I think any rallies in APRN stock should be faded.

As of this writing, Luke Lango was long AMZN, MCD and WTW.