Instacart Stock Jumps 40% On Debut: Why Josh Brown Says Investors Should Sell It Now

Zinger Key Points
  • Instacart shares opened for trading at $42, implying an approximate valuation of $14 billion — about 40% above its IPO pricing. 
  • "If you were lucky enough to get in on the IPO ... I would take the profit," Josh Brown says.

Maplebear Inc CART, better known as Instacart, made its public debut on Tuesday. The stock opened for trading well above its initial public offering price, which may be a gift for those who were able to get in early.

What To Know: Instacart priced its IPO at $30 per share late Monday, which was at the top end of the expected range.

Before landing on $30, the grocery delivery platform company on Friday raised the proposed range for its IPO from $26 to $28 per share to a new range of $28 to $30 per share, representing a valuation of up to $10 billion. Shares opened for trading Tuesday at $42, implying an approximate valuation of $14 billion — about 40% above its IPO pricing.

Instacart has been waiting to go public for a while now. The company was valued at $39 billion in its last funding round following a boom in business driven by the pandemic in which sales jumped approximately 590%.

Why It Matters: Ritholtz Wealth Management's Josh Brown believes Instacart investors would be smart to sell on the pop.

"If you were lucky enough to get in on the IPO ... I would take the profit," Brown said Tuesday afternoon on CNBC's "Fast Money Halftime Report."

"Most of the people that have an opinion on this stock have not read the S1. I have — they're going to let employees sell as much as 35% of their stock as soon as November because this has been pent-up on the runway for so long."

Brown expects there to be a lot of selling pressure in the name in the short term and with the stock surging on its debut, it looks like a good time to take profit, he said.

See Also: US Stocks Resume Declines As Treasury Yields Kick Higher, Chipmakers Extend Downside: What's Driving Markets Tuesday?

CART Price Action: At its highs of the day, Instacart shares were up about 43%, but the stock has trended lower in early afternoon trading. At the time of publication, Instacart shares were up 26.67% at $38.01, per Benzinga Pro.

Photo: Tumisu from Pixabay.

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