Yesterday, SoftBank’s Arm Holdings clocked a blockbuster initial public offering (IPO) – the biggest of the year – by raising nearly $5 billion and setting the tone for a strong comeback of the depressed IPO market. Now, it has made a rather explosive return to the public markets after its shares opened above the IPO price of $51 on the Nasdaq exchange, soaring to $56.10 in early trade. By the end of the day, these shares had reached a closing price of $63.59, marking an astounding increase of 25% over the IPO price.
When trading had opened under the ticker symbol “ARM,” the firm was valued at almost $60 billion and sold about 95.5 million shares. Subsequent after-hours trading pushed the price even higher, currently resting at $64.70, while the British firm itself is valued at a staggering $65.24 billion. It seems to be a satisfying result for the firm which had been eyeing an entry to the public markets for quite some time, and whose prior acquisition by Nvidia had to be called off half-way. With the IPO and spectacular entry of Arm into the public markets, Japanese conglomerate SoftBank will continue to retain a stake of 90.6% in Arm.
Arm’s strong IPO and entry to the public market comes as a breath of fresh air for the IPO market, which had been in a state of dormancy in recent times due to economic uncertainties. Several high-profile companies, including grocery delivery firm Instacart and German footwear brand Birkenstock, are now poised to go public in the coming weeks. Arm’s successful return has instilled confidence in the IPO market, potentially paving the way for more ventures to follow suit.
“As CEO of Arm, it is our opportunity to bring AI to everyone, everywhere and that excites me most,” Haas said in a statement before trading began. “Seventy percent of the world’s population relies on Arm technology today, putting us in a unique position to advance AI across all devices. And as a public company, Arm is in a stronger position to strengthen our already talented engineering team and invest in more AI opportunities.”
In a presentation to investors, Arm had projected that the total market for its chip designs would be worth approximately $250 billion by 2025, encompassing growth in chip designs for data centers and automobiles. Despite a slight dip in revenue in the fiscal year ending in March, Arm remains a vital player in the tech hardware ecosystem, with its chip designs powering nearly every smartphone globally.
Arm’s appeal is evident in its ability to attract strategic investors. The company raised $735 million in shares from a group of key players in the tech industry, including Apple, Google, Nvidia, Samsung, AMD, Intel, Cadence, Synopsis, and Taiwan Semiconductor Manufacturing Company.