The supermarket delivery app Instacart (CART.O) joined other new stock market entrants in failing to maintain high gains on debut as its stock price ended the day over 11% lower.
Investors had hoped that a recent flurry of fresh listings would revive the IPO market following a nearly 18-month dry spell, but with ongoing concerns about inflation and rising interest rates, shares of chip manufacturer Arm and RayzeBio (RYZB.O) have fallen from their debut highs.
According to Mark Luschini, chief investment strategist at Janney Montgomery Scott, the market appears uncertain about whether the current state of the economy can sustain the high valuations of those IPOs.
As individuals continue their entrenched habits of purchasing groceries online, Instacart, which includes Costco Wholesale (COST.O), Kroger (KR.N), and Aldi among its retail partners, has witnessed an increase in orders despite the pace decreasing from epidemic highs.
After finishing 12% higher in their Nasdaq debut on Tuesday, the San Francisco-based company’s shares failed to hold onto an intraday increase of as much as 43%, and they ultimately closed at $30.10 on Wednesday. Following its first public offering on Monday, the company was valued at around $9.9 billion.
According to information provided by the business in its IPO filing, Instacart’s overall revenue for the six months ended June 30 increased 31% year over year while gross profit increased 44%.
The corporation began making plans to go public approximately three years prior to the listing. PepsiCo (PEP.O), which has committed to purchase $175 million in preferred convertible stock, expressed interest in the company in August.