💡Summary:

• Instacart opens 40% up at $42/share

• CART began trading on the Nasdaq Tuesday following its eagerly awaited initial public offering.

Online grocery delivery company Instacart, incorporated as Maplebear, began trading "CART" on Tuesday following an initial public offering. From opening, the price declined to a gain of 25% in the $37 range.

The firm's IPO priced on Monday at a top-of-range $30 a share, giving the firm about a $10 billion valuation prior to Tuesday's opening. Throughout the day, CART's projected pricing rose.

Barrons reported Instacart's new valuation reflects the market shift since the firm assessed itself at $24 billion in March last year. The valuation has also fallen from a $39 billion estimate in a late-stage venture capital round in 2021.

Instacart's valuation depends on investor faith in the gig economy. The company uses contractors to deliver groceries to homes and is asking for a valuation between 3.64 to 3.9 times 2022 sales revenue. Its most closely related peer, DoorDash, has a price-to-sales ratio of 4.2 times future sales. Other gig companies have lower ratios, with Uber at 2.8 times sales and Lyft at one times sales.

Q:

Will Instacart follow in Arm's footsteps with a healthy IPO?

Are Tech IPOs back?

View disclosures here.