Arm·Instacart, Stock Prices Decline... Is the US IPO Market Losing Momentum?

Arm, 4 Consecutive Days of 4% Decline
Instacart Stock Drops Over 10%
IPO Subscription May Reduce Investment Incentives

The stock prices of Instacart, a U.S. grocery delivery startup that recently completed a successful IPO, and Arm, a UK-based semiconductor design company, fell by more than 4% and 10% respectively compared to the previous trading day. There are concerns that the U.S. IPO market, which was expected to gain momentum from the listings of these two companies, may lose its rebound momentum.

On the 20th (local time) at the New York Stock Exchange, Instacart closed at $30.10, down 10.68% from the previous closing price of $33.70. The day before, Instacart started trading on the Nasdaq market at $42, which was $12 (40%) higher than the IPO price of $30. However, the stock price dropped to as low as $29.96 during the next day’s trading session. Instacart attracted industry attention as a company that grew through venture investment. It is the first company to go public after growing through venture capital since December 2021.

Arm, which began trading on the 14th, closed at $52.91 on the day, down 4.10% from the previous day’s $55.17. Arm started trading at $56.10, 10% higher than its IPO price of $51, and its stock price surged 25% intraday to $63.59 on the first day. However, it recorded a decline of over 4% for four consecutive days starting the next day.

Marketing automation platform Klaviyo, which started trading for the first time on the same day, began trading at $36.75, 22.5% higher than its IPO price of $30. However, the stock price declined in the afternoon, closing at $32.76, up 9.20% from the opening price. Compared to Instacart, Klaviyo is less well-known among general consumers. However, it attracted attention from tech stock investors as a company providing customer management software. Due to higher-than-expected demand during the IPO subscription, the IPO price was set at $30 per share, exceeding the initial range of $27 to $29.

With Arm and Instacart, which were spotlighted as major players in this year’s IPO market, experiencing a downward trend, there are concerns that the public offering market could shrink again. The rapid decline in stock prices compared to the IPO price is analyzed to reduce investors’ incentives to participate in IPO subscriptions.

An industry insider commented, "The recent decline in stock prices of newly listed companies could be the biggest threat to the revival of the IPO market," adding, "Investors may question whether they should participate in IPO subscriptions when they can buy stocks at prices 20% lower than the IPO price a few months after the company goes public."

This content was produced with the assistance of AI translation services.