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 $51, at the top of the indicated range ($47 to $51) for its listing on the Nasdaq, since its acquisition in 2016 by the Japanese Softbank.
At this price, the company is worth $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 $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 $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 $16 billion from the Vision Fund, its investment fund specialising in technology stocks, giving the chip designer a valuation of $64 billion. Arm's several large customers, including NVIDIA, Samsung Electronics, Apple, Advanced Micro Devices and TSMC, decided to purchase shares totaling $735 million in the IPO.
