The U.S. IPO market has been a bit busy recently.。

Following the largest IPO of the year - Arm listed a week later, the U.S. version of "Meituan" Instacart also landed on NASDAQ on Tuesday (September 19), trading code for "CART."。The Instacart offering, led by Goldman Sachs and JPMorgan Chase, is priced at $30 per share and valued at approximately $10 billion.。

Instacart was founded in 2012 as a grocery delivery platform。Instacart is North America's leading grocery technology company, working with more than 1,400 retail brands that account for more than 85% of the grocery industry.。Currently, more than 80,000 stores in North America offer online shopping, delivery and pickup services on the Instacart Marketplace.。Between 2018 and 2022, Instacart's GTV grew at a CAGR of up to 80%, compared to 50% for the overall online grocery market and 1% for the offline grocery market.。

Instacart's development benefited from a surge in demand for grocery delivery during the outbreak.。In the early days of the epidemic, the company's business soared 600%。Growth later slowed as the epidemic subsided。

Instacart turned profitable for the first time in the second quarter of 2022, and this trend continued into this year.。Instacart's revenue for the first half of 2023 was 14.$800 million, up 31%。In the second quarter of this year, the company recorded a net profit of 1.$1.4 billion, up from $8 million in the same period last year。

Instacart CEO Fidji Simo says the grocery industry is undergoing a massive digital transformation。Groceries are the largest retail category, representing a value of 1 in the United States alone..A $1 trillion industry。But today, only 12% of grocery sales are done online。He believes online penetration could double or more as more people shop online。

According to the filing, venture capital giant Sequoia Capital and hedge fund D1 Capital Partners were the largest shareholders in Instacart, holding 15% and 14% of the company before the IPO, respectively.。After the issuance of new shares, their shareholdings were reduced to 14% and 13%, respectively.。Other venture investors in Instacart include Tiger Global Management and Coatue Management, according to PitchBook。

The company's three co-founders - Apoorva Mehta, Brandon Leonardo and Maxwell Mullen - collectively owned 17% of the company before the IPO.。Mehta, former Instacart CEO, owns 11% of the shares, while the remaining two each own 3%。Mehta stepped down as Instacart CEO in 2021 and named former Facebook executive Fidji Simo as his successor.。

All three co-founders took advantage of the IPO opportunity to cash out some of their founding stakes.。Leonardo and Mullen sold 1.5 million shares each in today's offering and Mehta sold 700,000 shares.。

Instacart opens higher and goes lower on first day of listing, Arm falls for three days

As another high-profile newly listed stock after Arm, Instacart surged 40% at the start of the day before gradually falling back, falling to 12% by the close, nearly half of Arm's first-day close of more than 24%.。

The stock hit 42.Close at 33 after $95 high.$70, valued at about $9.9 billion。

In fact, Instacart chose to go public at this point, and its valuation is already more than 70% below its peak.。Instacart's valuation peaked at $39 billion in 2021, driven by strong business。However, Instacart did not launch an IPO at the time, thus missing the best IPO period of 2021.。

From 2022 to the present, valuations of some startups have shrunk significantly due to the deteriorating economic environment caused by factors such as inflation and the Fed's rapid rate hikes。As a result, the US IPO market has fallen into an 18-month "ice age."。According to Dealogic, there were 1,010 IPOs in the capital markets in 2021, with that number falling sharply to 173 by 2022.。

Arm, which debuted just last week, is seen as a hope to revive the U.S. IPO market, riding the AI "east wind" that has been hot in recent months.。Boosting, Arm also lived up to expectations on its first day of trading, rising nearly 25% by the close, but then Arm turned around and fell。In addition to surging on its first day of trading, Arm has fallen every day since.。fell 4 on Tuesday..After 9%, Arm is now down 13% from its first day of trading, but still about 8% above its $51 IPO price。

According to Daniel Morgan, portfolio manager at Synovus Trust in Atlanta, "People are waking up a bit from the initial excitement.。"

Optimistic investors are pinning their hopes on the need for surging interest in AI, but Morgan believes this requires more (market optimism) evidence。He has a stake in Nvidia in his portfolio but has not invested in Arm。

Instacart was preceded last week by a biopharmaceutical company, Neumora Therapeutics, also listed on the Nasdaq, but the market reacted coolly to it.。The stock went public and broke, with Neumora offering for $17, but opening at 16.$5, down 2 from issue price.9%, closing at 16.$25, down 4 from issue price.41%。

This is seen as a sign of limited investor enthusiasm for newly listed stocks。

Markets turn short as enthusiasm fades

Data from analysis firm Ortex on Tuesday showed that short sellers have begun shorting Arm shares, "lending out" just over 5 million shares of the newly listed chip design company, or 2 percent of the stock's free float..7%。

Ortex says short sellers need to borrow shares to sell it short, and the relationship between the shares lent and the shares sold short is often very close。

Ortex co-founder Peter Hillerberg said in an email that initially new stocks "usually lose a lot of data, so there is a reasonable expectation that the actual number will be higher."。

According to Ortex, Arm's average borrowing cost (i.e., borrowing rate) is currently 12.76%。By comparison, Tesla's borrowing costs are 0.48%。Hillerberg said Arm's higher borrowing costs "may indicate a high demand for borrowing and shorting the stock."。

Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta, said some initial volatility is expected for new assets in the market.。But when the initial excitement subsides, it will return to indicators related to its final market and end users。

Bernstein, as well as analysts at Needham, have given less-than-optimistic views in recent days on Arm and stock options that began trading on Monday, with many investors bracing for further declines.。

Bernstein rated Arm "underperforming" with a price target of $46, which implies further declines compared to the current price.。The bank's analyst Sara Russo wrote: "While expectations that Arm will benefit from AI growth may put a premium on the share price, we believe it is too early to declare Arm a winner in the AI space."。As the mobile terminal market matures, we believe that our expectations for revenue growth are too optimistic。"

In addition to Bernstein, New Street Research and Need ham give Arm a "buy" and "hold" rating, respectively.。

Late Monday, Arm announced that its underwriters had exercised their full over-allotment stake to buy an additional 7 million shares of American Depositary Shares (ADSs), bringing the total funds raised by the IPO to about $5.2 billion.。