To The Moon

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After the bear market of 2022, the initial public offering (IPO) of the US stock market is hot again, and Wall Street is probably the happiest now. Today, the IPO's floodgates are open again, and many well-known companies are waiting in line to go public, such as $ARM Holdings PLC(ARMH)$, a semiconductor company that recently successfully listed on Nasdaq.

Even before Arm Holdings' IPO buzz is over, and $Instacart, Inc. (Maplebear Inc.)(CART)$, a grocery distribution company that has set an initial public offering price today and will begin trading on Tuesday, has become the focus of Wall Street.

Instacart IPO pricing

On Tuesday, Instacart set the final price of its initial public offering at $30 per share, at the top of its most recent expected range of $28 to $30. has been continuously raised during the IPO, reflecting very strong investor demand.

However, Instacart's IPO isn't considered a huge success by many. Two years ago, when demand for grocery delivery was at its highest ever, the company was valued at $39 billion in the private markets. By contrast, today's $30 IPO price corresponds to a valuation of only close to $10 billion, so some VCs may quit with "cutting lose" .

But in any case, many market participants are happy to see Instacart break free from the shackles of venture capital firms. In contrast, Arm Holdings is already a wholly owned subsidiary of Japan's SoftBank Group, so its IPO is not quite the same. What the two IPOs have in common, however, is that they currently have a relatively small share of the number of shares outstanding, which could help support share prices.

Arm's share price remains volatile

Shares of Arm Holdings opened down about 5% on Tuesday, continuing Monday's downward trend. Last week, the semiconductor maker priced its IPO at $51 and its shares climbed as high as $66 on the first day of trading before closing at $63.59. However, the stock has continued to fall since then, and while the stock has not yet fallen below the IPO price, it has given up more than half of its gains.

There is a lot of debate about Arm's potential. One school of thought is that the company plays a key role in the electronics industry, with its processing chips and architectures used in many computers and mobile devices.

In addition, Arm is interested in exploring opportunities in data center and edge computing. However, some investors question whether Arm can eat the "fat meat" of these high-growth markets, or be trapped in industry segments with limited expansion potential. The IPO's price is also quite high by some valuation measures, which has value investors worried about the upside potential of the stock.

IPO always attract a lot of attention, but they can be quite a challenge for investors who want to make informed decisions. Before you have all the information, the best strategy is to wait for the dust to settle, rather than buying up the IPO at the highest level.