Home Business Instacart and Arm IPOs Suggest Investors Still Have Appetite for Stocks. What Happens Next.

Instacart and Arm IPOs Suggest Investors Still Have Appetite for Stocks. What Happens Next.

by Mark Mendoza

The IPO market appears to be making a comeback, as evidenced by the recent successful debuts of chip designer Arm Holding and grocery delivery platform Instacart. This resurgence is good news for Wall Street banks, who have seen a relatively slow year in terms of IPOs. The recovery in the IPO market is occurring at a time when interest rates are at their highest level in 22 years, which may seem unusual. However, some believe that the market is anticipating that the Federal Reserve is finished with its rate hikes.

While the recent flurry of IPO activity suggests a return to form, there are still some caveats to consider. Instacart’s pricing at $30 per share values the company at $9.9 billion, significantly lower than its valuation of $39 billion in 2020. Additionally, Arm’s strong trading debut has been tempered by the fact that its shares have fallen in the days following its initial jump. However, there is still strong demand for Arm shares, and its success has paved the way for other companies to consider going public.

The market has already seen other companies lining up to enter the IPO space. Marketing software company Klaviyo is scheduled to go public soon, and both German sandal maker Birkenstock and British chip designer Imagination Technologies have filed to list in the US. It is hoped that Arm’s success will create a tailwind for other newcomers and the broader market.

Overall, while the IPO market is showing signs of a resurgence, it is important to approach this cautiously. The lower valuation of Instacart and the mixed performance of Arm in the days following its debut indicate that there are still risks involved. However, the renewed activity is a positive sign for both market participants and investors, and it will be interesting to see how this trend continues to develop in the coming months.

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