David Huang
Sep 19, 2023 - 10:16

'Instacart stock surges 40% on market debut'

Instacart's IPO price of $30/share values the grocery delivery app at $10 billion, following Arm's successful return to the public markets.

Instacart, the popular grocery delivery app, has announced its initial public offering (IPO) with a share price of $30, valuing the company at approximately $10 billion. This comes shortly after Arm, a leading chip designer, made its return to the public markets. While Arm initially saw a 20% increase in stock value during its first trading session, it has since experienced an 8% decline.

The decision to raise the pricing range for Instacart's IPO was influenced by Arm's successful listing. This has sparked discussions about the potential for these public offerings to revive a market that has been relatively stagnant over the past year. In 2021, there were 1,010 IPO deals, but this number decreased to 173 in 2022.

Experts in the IPO field believe that Instacart may serve as a better indicator of an IPO market comeback due to the significant differences in its business model compared to Arm. Arm, valued at $54.5 billion, is a well-established chip designer that powers 99% of premium smartphones. On the other hand, Instacart will be entering the public market for the first time. Previously valued at $39 billion, the company has shifted its focus to advertising revenue rather than solely relying on direct sales to customers.

In the first half of 2023, Instacart reported a revenue of $1.48 billion, a 31% increase compared to the same period the previous year. Advertising accounted for 28% of this revenue. These figures highlight the company's successful transition and its potential for continued growth.

Overall, Instacart's IPO and its unique business approach have generated significant interest in the market. Investors are keen to see if this offering can revitalize the IPO market and pave the way for future successful public listings. Only time will tell how Instacart's IPO will fare, but it certainly has the potential to make a significant impact.

Josh Schafer, a reporter for Yahoo Finance, has provided valuable insights into this development. For the latest stock market news and in-depth analysis, including events that influence stock prices, click here. Stay informed and make informed investment decisions.