Instacart's shares decreased by greater than 5% on Wednesday, the second day of trading, continuing a downward pattern that started when the stocks first entered the market on Tuesday. This drop in Instacart's stock price indicates that investors are still not in support of tech businesses that have uncertain business tactics. On Tuesday, Gene Munster, the managing partner of Deepwater Asset Management, voiced his doubts about Instacart in an interview with CNBC's "Closing Bell."
Instacart's shares fell by more than 5% on Wednesday, the second day of trading, taking them below the initial public offering (IPO) price of $30. The selling began on Tuesday soon after the company first listed its stock on the Nasdaq, under the ticker symbol CART, reaching an intraday high of $42 (a 40% pop). Wednesday afternoon saw the rally further fizzle, with shares trading at below $32.
The grocery delivery company's IPO came at a time when the market had been mostly closed since late 2021 due to rising inflation and interest rates; however, Instacart's falling stock appears to suggest investor hesitation to invest in disruptive tech companies despite such unfavorable economic conditions. Joining the public market alongside Instacart are companies such as Airbnb, DoorDash, Uber and Lyft. So far, only Airbnb has been a lucrative purchase for investors.
Gene Munster, managing partner at Deepwater Asset Management, voiced some concerns about Instacart in an interview with CNBC on Tuesday. He said that the initial surge may have been "misleading" and a common occurrence with IPOs, and suggested evaluating whether the order growth will in fact pick up in the future, hinting that it may not be as dramatic as Uber's.
A Tuesday Needham report also issued a hold on Instacart's stock, stating that growth may be harder to come by in the next three years, citing potential "structural headwinds" against adoption.
Klaviyo, a marketing automation company, hit the market on Wednesday, with shares initially rising 23% to $36.75 prior to dropping some of the gains.
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