Court Dismisses Instacart IPO Securities Suit

According to an article by A&O Shearman, on May 9, 2025, Judge Edward J. Davila of the Northern District of California dismissed an IPO securities suit against Instacart (formally known as Maplebear Inc.), its officers, directors, and IPO underwriters. 

In Stephens v. Maplebear Inc., plaintiffs alleged that defendants made materially false and misleading statements concerning the strength of the company’s brand and financial projections in violation of the Securities Act and the Exchange Act. The court dismissed the complaint in its entirety, with leave to amend, finding that plaintiffs failed to adequately plead falsity, scienter, or loss causation.

Plaintiffs claimed that Instacart misrepresented its brand strength and financial outlook during its initial public offering (IPO), which followed a period of rapid growth during the pandemic that later slowed. However, the court found plaintiffs had not substantiated their claims. Allegations concerning the company’s brand relied on a single confidential witness whose observations predated the alleged misstatements by nine months, rendering them insufficient to demonstrate falsity. The court emphasized that falsity must be measured at the time a statement is made, not based on outdated information.

With respect to financial forecasts, the court found most statements were vague generalities or aspirational goals rather than actionable misrepresentations. Even where one growth-related statement appeared more concrete, it was made before the class period and thus not actionable. Additional statements were dismissed as puffery, protected opinion, or forward-looking statements shielded by adequate cautionary language.

The court also held that plaintiffs failed to establish scienter or loss cau sation. The confidential witness allegations were again deemed too remote in time, and the plaintiffs failed to identify specific facts demonstrating the defendants’ access to contradictory information. Because no primary violations were adequately pleaded, the control person’s claims also failed.

For attorneys and compliance officers, this IPO securities suit decision highlights the importance of presenting contemporaneous and well-substantiated allegations when challenging IPO disclosures under the securities laws.