New Tech IPOs Struggle To Sustain Initial Rally


The recent tech IPOs of Instacart and Klaviyo have created a stir in the startup world, generating much excitement and anticipation for more successful exits in the future. While there have been some notable mergers and acquisitions, the true game-changers in the industry have been initial public offerings (IPOs). However, the initial momentum of these recent IPOs appears to be short-lived as both companies’ shares started to decline soon after their public debut.

Key Takeaway:

The recent IPOs of Instacart and Klaviyo have witnessed an initial surge in stock prices but have struggled to maintain their momentum in the market. The experience of these companies highlights the volatility and challenges faced by tech startups during their transition to becoming publicly traded entities.

Instacart’s Volatility

Instacart, an online grocery delivery platform, made its highly anticipated IPO at $30 per share. The stock price quickly surged to a high of $42.95 per share, only to lose its gains and currently sits at $29.97 per share. This rollercoaster ride illustrates the challenges faced by newly listed companies in sustaining their momentum in the stock market.

Klaviyo’s Market Performance

Similarly, Klaviyo, a customer data and marketing automation platform, faced a similar fate. After an initial public offering price of $31 per share, its stock peaked at $39.47 per share but has now settled at $32.15 per share. While the company’s shares are still trading above the IPO price, the downward trend raises concerns about the long-term performance of these tech IPOs.

Arm’s Resilience

In contrast, Arm, a semiconductor design company, managed to maintain a relatively stable position in the market. Despite experiencing fluctuations, it started at $51 per share, reached a high of $69 per share, and now stands at $50.94 per share. Unlike Instacart and Klaviyo, Arm’s stock has not plunged significantly below its initial listing price.

While these setbacks may disappoint investors, it’s important to note that the success of an IPO should be evaluated over a longer timeframe rather than focusing solely on the initial price movements. Only time will tell whether Instacart and Klaviyo can overcome their early difficulties and thrive as public companies.

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