The Softbank Group Corp. pegged Arm Holdings shares at $51 for its Nasdaq debut today. All market eyes are on this chip maker’s IPO performance as many experts believe it will be indicative of what to expect from other tech IPOs onwards.
Final decision on Arm share price ensures smooth market entry
Analysts estimate the company is worth roughly $54.4bn at this price. Softbank also received praise for its conservative approach to the IPO. Oversubscribed by more than 10 times, the group stayed its course and did not push for a higher share price.
As investor interest exceeded share supplies at a price range between $47 and $51 per share, it is likely that Arm can see significant price hikes when stock trading starts later today. When setting the final price for the IPO, Softbank’s founder, chairperson, and chief executive officer, Masayoshi Son, indicated an unwillingness to compromise demand, even if it meant a lower entry valuation.
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Experts believe this approach indicates Son’s long-term commitment to Arm. The company is one of a handful of chip manufacturers that are being bombarded by demand as the world gets to grips with AI advancements and possibilities. The microchip demand alone boosted counterpart Nvdia’s value to an approximate $1.1trn.
Looking back, Arm was previously listed on the London Stock Exchange and Nasdaq from 1998 to 2016. After the Softbank takeover of $32bn and a failed Nvidia deal, the company was delisted.
Initially, Arm aimed to raise between $8bn and $10bn with its renewed listing. But then Softbank bought approximately 25% of the Vision Fund share slice, which then catapulted the company’s value to about $64bn.
