Instacart’s debut rally is fizzling out, just a day after it went public in one of this year’s biggest US listings.
(Bloomberg) — Instacart’s debut rally is fizzling out, just a day after it went public in one of this year’s biggest US listings.
Shares in the grocery delivery firm fell as much as 5.7% in US premarket trading on Wednesday to $31.79, poised to pare some of the stock’s first-day gains. The company, which is incorporated as Maplebear Inc., also got its first analyst initiation — a lukewarm hold rating from Needham.
The stock was already showing signs of fading on Tuesday — closing 12% higher than the $30 per share IPO price after an initial jump of as much as 43%.
After the debut, Needham’s Bernie McTernan started coverage of Instacart with a hold rating, flagging rising competition from the likes of Uber Technologies Inc. and DoorDash Inc., as well as more muted expectations for post-pandemic online grocery sales. Many Wall Street banks that were involved in the IPO are now in a quiet period for coverage.
“We see a balanced risk-reward reflecting slowing growth in the years following a pandemic-driven demand surge and CART’s already scaled advertising business,” Needham’s McTernan wrote in a note.
Despite the fizzle in the shares since the debut, the offering has been popular. The $30 per share IPO price was at the top of the $28 to $30 range, and the offering was more than 23 times oversubscribed, according to people familiar with the matter.
Instacart is one of the biggest companies to list in nearly two years. Along with chip designer Arm Holdings Plc’s debut earlier this month, Instacart’s IPO has stoked hope that US listings will see a revival.
Read More: Instacart IPO Puts Spotlight on Its Evolution Into Ad Seller
–With assistance from Bailey Lipschultz.
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