Instacart soars 40% in public debut as the 2nd splashy IPO in less than a week tests the market

• Instacart debuted on the Nasdaq on Tuesday after pricing its IPO at $30 a share.
• The stock surged 40% when it began trading around 12:50 p.m. ET.

Instacart made its stock market debut on Tuesday, jumping as much as 40% in its first trades following its initial public offering which valued the grocery delivery company at $10.2 billion.

The company sold shares to investors at $30 each, completing the second high profile IPO in less than a week on the heels of chip designer Arm's splashy debut last Thursday.

Shares of the company soared 40% to $42.06 shortly shortly after the stock began trading around 12:50 p.m. ET.

The company completed its IPO at the top end of the expected range, securing a valuation of about $10.2 billion. That's about a quarter of the $39 billion valuation it secured at the height of the pandemic's grocery deliver boom.

In the first half of 2023, Instacart saw $242 million of net income from about $1.48 billion in revenue.

The company, listed under the ticker "CART," is the second high-profile IPO in less than a week, following Arm's launch on Thursday.

At a $55 billion valuation, the Softbank-backed chip designer completed the biggest IPO since 2021 as the market for new offerings has been hamstrung by higher interest rates, lower liquidity, and high volatility.

Arm stock had surged more than 25% on its first day of trading to about $61 a share, though on Tuesday it declined to $54, closer to its IPO price of $51. The British firm drew a roster of headline cornerstone investors including Samsung, Google, Apple, and Nvidia.

Some strategists have pointed to both Instacart and Arm's big debuts as reason to believe the bottom is in for the IPO market and a comeback is on the horizon, though others say neither present a good gauge given their large size and recognizable brands compared to other early-stage companies that might be looking to IPO.

David Erickson, a senior fellow at Wharton, pointed out that most of the companies that went public during the last two years have since fallen below their IPO prices, which is similar to what happened in the years following the dot-com bust.

"What we had in 2020 and 2021 was very emblematic of what we saw back then," Erickson told Insider in a recent interview. "There was so much excitement around growth companies, and the market got carried away. After 2000, it took years before IPOs came back, and now we're kind of at that period too."