Arm Holdings, the chip designer owned by SoftBank (TYO:9984), made its market debut on Thursday, marking the largest initial public offering (IPO) in the US since 2021. The company was valued at approximately $54.5 billion, a significant increase from the $40 billion offered by Nvidia (NASDAQ:NVDA) in its failed acquisition bid.
The listing raised about $4.9 billion, with shares priced at $51 on Wednesday, at the top of the $47 to $51 range due to high demand for the stock. SoftBank will retain approximately 90% of the company, with only about 10% being sold. This relatively scarce supply could potentially push the price higher when trading begins.
This IPO is Arm's second public listing in nearly thirty years, with the company previously going public in 1998 before being acquired by SoftBank in 2016 for $32 billion. Arm's technology is utilized in over 90% of smartphones globally and according to its prospectus, about 70% of the world's population used Arm-based products.
The listing is also seen as a measure of enthusiasm for AI-related stocks and could prompt more firms to go public following a prolonged slump in listings over the past 18 months. However, some commentators have expressed concerns about the broader outlook, drawing comparisons to the aftermath of the dot-com bubble in 2000.
Arm CEO Rene Haas expressed gratitude to employees for their commitment through "a long road with lots of twists and turns we never anticipated nor expected." He further stated that Arm is now in a "stronger position to strengthen our already talented engineering team and invest in more AI opportunities."
Despite early speculation that the IPO value could reach as high as $70 billion due to interest from big tech companies such as Amazon (NASDAQ:AMZN), Nvidia, and Intel (NASDAQ:INTC), Arm's market capitalization of roughly $54.5 billion still marks a significant milestone for the company. The listing is the biggest since Rivian (NASDAQ:RIVN)'s near-$12 billion debut in October 2021.
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