Instacart downgraded to Hold at Benchmark with lock-up about to end

As previously reported, Benchmark analyst Mark Zgutowicz downgraded Instacart to Hold from Buy and removed the firm’s previous price target on the shares following today’s announcement of the termination of Instacart’s lock-up agreement on February 15. While the firm notes it had acknowledged liquidity risks in its recent initiation of Maplebear, the parent of Instacart, it had anticipated a more “orderly process” to manage this liquidity in March and is moving to a Hold rating until “this liquidity event is properly digested in the market,” the analyst tells investors. The firm believes that having substantially all of Instacart’s shares outstanding and open for sale on February 15 will lead to a supply/demand imbalance that is likely to weigh on the stock in the near-term, the analyst added.