Arm Priced at US$51 on IPO Day

Sale of nearly 10% of the chip designer values it at US$54.5 billion, and the IPO will be the largest this year.

Jocelyn Jovene 14 September, 2023 | 8:05AM
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Arm holdings building

For its return to the stock market, Arm Holdings preferred to play it safe. The British company, which specialises in chip design and undisputed leader in the smartphone market, finally achieved a listing price of US$51, at the top of the indicated range (US$47 to US$51) for its listing on the Nasdaq, since its acquisition in 2016 by the Japanese Softbank.

At this price, the company is worth US$54.5 billion, or 20.2 times its 2023 turnover, a particularly high level of valuation. According to the Wall Street Journal, the company once considered offering its securities at US$52 before finally settling on a slightly lower price. Softbank is placing 95.5 million shares, or around 10% of the capital, and plans to retain its securities.

With an extraordinary banking syndicate for an operation of this size (30 banks are cited on the IPO prospectus to place US$5 billion dollars on the market), the participation of heavyweights of the semiconductor industry seems to ensure the success of the flotation. RM's IPO will be the largest of the year, in a context marked by growing economic uncertainty, high interest rates and a rather moribund IPO market.

Before the IPO, Softbank had bought 25% of Arm's capital for US$16 billion from the Vision Fund, its investment fund specialising in technology stocks, giving the chip designer a valuation of US$64 billion. Arm's several large customers, including NVIDIA, Samsung Electronics, Apple, Advanced Micro Devices and TSMC, decided to purchase shares totaling US$735 million in the IPO.

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Jocelyn Jovene

Jocelyn Jovene  Senior Financial Analyst, Morningstar France

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