Instacart’s IPO has received a boost after the grocery delivery service revised its terms to target a fully diluted valuation of up to $10 billion, reports Reuters. The San Francisco-based company’s first implied valuation was initially between $7.7 billion and $9.3 billion.
The increase is due to heavy investor demand and a big opening day of trading for British chip designer Arm. Arm exploded out of the gate Thursday, as shares hit $56 during the first few minutes, which is a 10% increase from the company’s IPO of $51 per share. For the day, Arm stock was up 25%. According to Forbes, because of Arm’s immediate success Instacart was able to up its IPO.
Instacart, which will have its trading debut on Sept. 19, is planning for 22 million shares of its stock to be sold at $28-$30 each after the initial price range was set at $26-$28. The IPO will now bring in up to $660 million instead of the first target of $616 million.
In total, $237 million could be directed to existing Instacart investors looking to sell shares.
According to Reuters, investors have indicated they will buy up to $400 million worth of Instacart shares, accounting for two-thirds of the proceeds if they were priced on the high end.
September has been a huge month for traditional U.S. IPOs, as they have generated more than $5 billion. It is already the second biggest month for share offerings in 2023.
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