Arm Holdings Sets $54.5 Billion Value as it Returns to Stock Market
UK-based chip designer Arm Holdings is making a comeback to the stock market with a value of $54.5 billion (£43.6 billion) in a highly anticipated move.
The company, primarily owned by Japan’s SoftBank Group, is all set to commence trading today on the Nasdaq exchange in New York.
Due to strong demand from investors, Arm was able to sell 95.5 million shares, which represents a 9.4% stake in the company, at the top-end price of $51 (£41) per share.
While this market valuation is better than the $40 billion (£32 billion) it would have received if the proposed sale to Nvidia had gone through last year, it falls short of SoftBank’s valuation of $64 billion (£51 billion) for Arm just a month ago.
This initial public offering (IPO) is the largest on Wall Street since Rivian’s debut in 2021.
In a global economy grappling with slowdown, many companies have been hesitant to go public. However, the tech industry has bucked the trend.
Arm, headquartered in Cambridge and employing 2,800 staff, plays a crucial role as its processor designs are used in the majority of the world’s smartphones.
The tough economic climate has impacted Arm’s revenues, which rely on royalties, especially with smartphone sales slowing down. To counter this, the company is looking to expand its presence in the cloud computing market and seize opportunities in artificial intelligence (AI).
Major clients of Arm, including AI specialist Nvidia, Apple, and Samsung, have participated in the IPO by acquiring shares.
Share trading is set to begin at 2:30 pm UK time, with the opening price to be announced later.
Notably, Arm, which was previously listed in London until SoftBank’s acquisition in 2016, has chosen Nasdaq over its former home for this listing.