September 19, 2023, 4:04 pm EDT
Arm Holdings (ARM) and Instacart Inc (CART)
IPO market is always a hot place for traders and investors to chase. Because it offers an opportunity for fast profits as some people believe.
It is true that some companies have potential to climb and shoot up after IPO launching pads like Google, Facebook, etc. But, there are lots more companies to sink 50%, 60% or 80% after a few months of IPO days.
Therefore, we neither chase IPOs nor ignore them. We watch their performance in order to gauge what the stock market sentiment is.
In a weak market, IPO lists become rare. More importantly, their performance is disappointing overall. It means that traders and investors turn the mode to risk-on. Otherwise, when IPO stocks perform well, it is a risk-off mode because there are many reasons to believe tomorrow will be better.
Today is the IPO day of Instacart (CART) that followed the high-profile IPO Arm Holdings (ARM) last week. Their performance should give us a guidance of market appetite for the stock market. Let’s watch them for a month and see what happens.