Priced at $30 a share on Monday (Sept. 18) by the grocery-delivery company, the stock opened Tuesday at $42, rose as high as $42.95 during the day and closed at $33.70, The Wall Street Journal (WSJ) reported Tuesday.
The closing price was 12% higher than the IPO price and provided another promising signal for an IPO market that has been reawakening, the WSJ reported.
Instacart was one of this year’s high-profile debuts, preceded by that of British chip designer Arm and soon to be followed by marketing-automation company Klaviyo, according to the report. Arm saw its stock leap 25% in its public debut.
The grocery-delivery company had long been considering a public listing, and planned to do so before the end of 2022, but decided to delay when the market for IPOs tumbled, the report said.
Many of the later investors in Instacart are expected to see significant paper losses, as the company’s valuation of more than $11 billion achieved Tuesday is far below the $39 billion valuation it reached two years ago, per the report.
Instacart’s IPO price of $30 per share was at the high end of expectations. The company announced Monday that it had decided to raise its target price from the $26 to $28 per share it had considered a week earlier.
The move came as the IPO market was gaining momentum, with investor demand for new issues on the rise, as evidenced by Arm’s successful debut.
Instacart CEO Fidji Simo has been working to convince investors of her strategy to shift the company’s focus from grocery delivery to grocery technology. For one thing, the company plans to leverage the extensive consumer data it collects to assist grocery stores in boosting their sales.
In the company’s registration statement for its proposed IPO, which was filed Aug. 25, Instacart said it is the leading grocery technology partner to more than 1,400 retail banners that account for greater than 85% of the U.S. grocery market.
“At Instacart, we know technology will play a crucial part in transforming the largest retail category in the world,” Simo wrote in the registration statement. “We also know that the future of grocery should belong to the people who make it special today — and we can help them continue to innovate.”