How to buy Instacart stock (CART) in 2023: A step-by-step guide
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- You can soon buy shares of Instacart stock on the Nasdaq following Instacart's IPO in September 2023.
- To buy Instacart stock, set up a brokerage account, research Instacart financials, and come up with an investment strategy.
- IPO stocks tend to go to institutions and high-net-worth investors first, so retail investors will have to be patient.
The end of summer 2023 marks a new beginning for Instacart, as the popular grocery delivery and pick-up service announces that its initial public offering (IPO) is scheduled for some point in September 2023. After years of teasing a much-anticipated public offering, the time has finally come, making it one of the most high-profile US listings this year.
However, retail investors may still have a hard time buying the stock as IPO shares are often reserved for high-net-worth investors, bankers, hedge funds, and large institutions. Right now, SoFi Invest is the only confirmed brokerage that plans to offer Instacart stock to its users.
Here's how you can buy Instacart stock (CART).
About the Instacart IPO
On August 25, 2023, Instacart officially filed paperwork with the Securities and Exchange Commission (SEC) to become a publicly traded company. The business was founded in 2012 and over time has accumulated funding from 37 venture capital firms. The largest investors in Instacart to date have been Sequoia Capital and Capital Partners. The lead underwriters for Instacart's IPO are Goldman Sachs and JP Morgan Chase.
As a private company, only venture capitalists and certain high-net-worth individuals have previously been able to get their hands on Instacart shares (aka private equity).
The main goal for private equity investors is to "increase the company's profit from an exit," explains Matt Malone, head of investment management at Opto Investments. "The exit could be an initial public offering (IPO), sale, or other liquidity event. Private equity investors are paid with proceeds from those exits."
But that's all set to change. Soon retail investors will be able to find Instacart stock on the Nasdaq exchange under the ticker "CART." Retail investors are individual investors who use their own funds to buy, sell, and trade assets through brokerages/investment platforms.
Not only will Instacart be the most notable US venture-backed tech IPO since December 2021, but it will also be the first independent grocery delivery business to ever go public.
While no one knows for certain how it will all shake out, it has been revealed that Instacart plans to sell $175 million in Series A preferred stock to PepsiCo. SoFi, one of the best robo-advisors, is underwriting Instacart's IPO with plans to offer shares to SoFi users.
How to buy Instacart stock
1. Set up a brokerage account
First things first, you must have a brokerage account in order to buy Instacart stock. Traditional and online brokerage accounts allow you to access the stock market, invest in various asset classes, and securely store your investments all in one place.
"A brokerage is where your investment portfolio lives — this can be directly with an investment institution, either self-managed or managed by a broker-dealer or registered investment advisory firm. An online brokerage does the same thing, but usually, these are either a DIY option or the company uses an algorithm to invest your portfolio," says Samantha Gorelick, CFP and managing financial planner at Brunch & Budget.
There are several brokerage platforms out there, each with different requirements, limitations, fees, web and mobile access, and resources. Some of the most well-known online brokerages include Charles Schwab, TD Ameritrade, Robinhood, and Interactive Brokers.
SoFi Invest is the only brokerage known to hold Instacart shares with the intention of offering stock to its users. Therefore, opening an account with SoFi is not only your best option, but also your only option at this time.
Brokerages other than SoFi that will offer Instacart IPO stock are still largely up in the air. You might also get some luck by opening an account with a broker that already offers IPO access. Robinhood, for example, offers IPO access to users through its IPO Access Program. But there's no guarantee that you'll get access to Instacart stock.
You may also be able to invest in Instacart through mutual funds, such as Fidelity's Growth Company Fund. Fidelity recently bumped its Instacart Series H shares up 10% at the end of May 2023.
2. Research Instacart financials
While investing in a big name like Instacart may sound like a safe investment decision, it's essential that you do your due diligence first and conduct your own research. Although you can't review Instacart's historical stock performance, you can still tune into the company's recent profit history and current market standing.
Some key resources to analyze include:
- Company quarterly earnings reports
- Income statements
- Balance sheets
After skyrocketing during the COVID-19 pandemic and reaching its peak in Q2 of 2022, Instacart found itself steadily declining as inflation marked up prices on groceries and as people returned to shopping for themselves. Last year, the company cut its valuation multiple times. However, in 2023, Instacart raised its valuation to about $12 billion.
Instacart closed 2022 with $428 million in profits. During the first six months of 2023, Instacart reported a profit of $242 million. That's a significant increase compared to what the company earned during the same period the previous year.
Despite its recent success, higher grocery prices and economic concerns could hurt Instacart's success in the long run.
3. Determine how much to invest and place an order
In general, how much you want to invest depends on your individual investment goals, risk tolerance, and time horizon. It also depends on the price of the shares and how much you're looking to spend. There are four main types of orders you can make when requesting the share price you want:
- Market order: Orders are immediately executed so that the per-share price currently reflects the stock's current share value. But you can't set the share price before executions, which doesn't make it ideal for investors hoping to bear the stock's current market value.
- Limit order: You can set a price threshold for shares for buying and selling stock. This is best for investors who want control over how much they are spending on shares. For example, if Instacart stock is trading at $200, and you set your limit order for $150, the brokerage won't complete your order unless the stock's value drops to your limit order price.
- Stop order: Also called stop-loss order, this order type allows you to set a stop price. That means that if your stock reaches the stop price, it will become a market order and be executed immediately.
- Stop-limit order: Similar to a stop order, this type of order allows you to establish a set price to stop for your stock's value. But instead of becoming a market order, your order becomes a limit order when your stocks reach the established stock price.
But just because you request a certain number of shares doesn't guarantee that you'll get it. As mentioned above, IPO shares tend to be reserved for high-net-worth individuals and intuitions, so retail investors may struggle to get in on the action. Plus, brokers only have a set number of shares available, so you'll have to be patient.
4. Review your purchase and monitor your investment
Getting the shares is only the first step in turning a profit. You'll need to implement an investing strategy, such as a buy-and-hold strategy or dollar-cost averaging. This way, you won't be glued to the market hour by hour watching Instacart's stock chart.
Here are some common investing strategies:
- Buy-and-hold: This investment strategy is most appealing to passive and long-term investors. After purchasing a lump sum's worth of Instacart stock, you can sit back and wait for your shares to increase in value over time. You won't cash out until you feel the time is right.
- Dollar-cost averaging: If you want to regularly contribute to Instacart, this strategy may be a good fit. Instead of purchasing a large sum at once, you can determine how much you're wanting to periodically invest (e.g., $10, $50, $100).
As with an investment, no investment is immune to the fluctuations of the stock market. In the event of a struggling economy or a bear market, share prices may drop drastically. Make sure to keep cool and don't make any rash decisions.
"The risk of loss is possibly the greatest risk when investing your money. Diversification can help to mitigate this risk," says Gorelick.
Instacart IPO — Frequently asked questions (FAQs)
When does Instacart IPO launch?
The Instacart IPO is set to launch sometime in September 2023. After years of back and forth debate about going public, Instacart filed out paperwork with the SEC to become a publically traded company in August 25, 2023.
What will the Instacart IPO price be?
The Instacart IPO price has not been revealed, but there are some rumors that Instacart will consider pricing its listing on September 19, 2023, with trading starting the following day. But this timeline could easily change through the month.
Is Instacart traded on the stock market?
Instacart's upcoming IPO will put its shares on the stock market. Previously, Instacart was a private company so the general public could not buy shares of the top-performing grocery-delivery company. Instacart plans on trading on the Nasdaq under the ticker CART at some point in September 2023.
Is Instacart on NYSE?
Instacart is not currently traded on the New York Stock Exchange (NYSE). Instacart is set to launch its IPO and be traded on the Nasdaq starting in September 2023.
Should you buy Instacart stock?
Investors have been awaiting Instacart's IPO for some time, and now the time has finally come. But retail investors may have to wait a bit longer as certain high-net-worth investors, intuitions, and firms typically get first dibs on IPOs.
In order to buy Instacart stock, you'll need a brokerage account to gain access the market and have a secure place to store your investments. As investing in individual stocks are highly risky, you may want to invest in other assets like ETFs, mutual funds, index funds, or real estate. A diverse investment portfolio should be a key part of your financial plan.
Make sure to do your due diligence and research Instacart's financials and market history before buying in. If you're having trouble getting started, a certified financial planner (CFP) or financial advisor can help.
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