Arm shares jump more than 20% in IPO
SoftBank Group Corp's chip designer, Arm Holdings, set its initial public offering (IPO) price in the U.S. at $51 per share on Wednesday afternoon at the upper limit of the price range. The IPO raised $4.87 billion for SoftBank based on 95.5 million shares sold. This sent Arm shares soaring more than 20% in the IPO.
Launching Channel News Asia, on Thursday, September 14, 2023, the report concludes Arm's valuation on a fully diluted basis of USD54.5 billion, making it the biggest U.S. stock market debut since electric carmaker Rivian Automotive in 2021.
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| Arm CEO Rene Haas and executives cheer as Softbank’s Arm, a chip design firm, holds an initial public offering at the Nasdaq MarketSite in New York, Sept. 14, 2023 (Photo: Brendan Mcdermid | Reuters) |
The source requested anonymity before the official announcement. Arm and SoftBank declined to comment.
The Wall Street Journal mistakenly reported earlier that Arm was preparing to set its IPO price at $52 per share, which is above the specified range.
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Reuters sources said Arm discussed pricing the offer at $52 per share in a meeting with its investment bank, before setting the price at $51. Arm shares are scheduled to begin trading in New York on Thursday.
Lower IPO valuation
The IPO is a drop from SoftBank's $64 billion valuation last month, which acquired a 25 percent stake that SoftBank does not yet own from its Vision Fund for $100 billion.
Even with this lower valuation, SoftBank would see better results than its $40 billion deal to sell Arm to Nvidia Corp, which it abandoned last year amid opposition from antitrust regulators. SoftBank took Arm private in 2016 for $32 billion.
Arm has listed many of its key clients as major investors in its IPOs, including Apple, Nvidia, Alphabet, Advanced Micro Devices, Intel, and Samsung Electronics.