ARM Shares: Ready to Trade with Colossal IPO Valuation

Arm Holdings’ American Depository Shares (ADS) are ready to commence trading today on the Nasdaq stock exchange with a hefty valuation of $54.5 billion. The final pricing of ARM’s initial public offering (IPO) fetched $51 per share, the higher end of its targeted range of $47 to $51 per share. Shares will trade under the ticker symbol “ARM” today, September 14.

Arm’s successful listing could spark a positive sentiment for the upcoming IPOs of grocery-delivery company Instacart and marketing-automation platform Klaviyo.

All Eyes on ARM 

Softbank-backed (OTHEROTC:SFTBY) Arm’s IPO caught much attention, thanks to the ongoing artificial intelligence (AI) frenzy. Arm is a British semiconductor company and leading chip designer. Arm’s listing is set to be the biggest technology offering this year. Interestingly, Taiwan Semiconductor (NASDAQ:TSM) announced a $100 million investment in Arm’s IPO yesterday. TSM joins several of Arm’s customers who are throwing in money to the most awaited-IPO of the year. These include Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG, GOOGL), Nvidia (NASDAQ:NVDA), and Intel (NASDAQ:INTC).

Although Arm has cautioned that the mobile phone segment is slowing down, it seeks to capture a larger share of the cloud computing and AI market. Arm said last week that it expects the total addressable market (TAM) for chip designs to be worth $250 billion by 2025. During the pre-IPO roadshow, Arm said that its IPO was oversubscribed by more than five times.

Softbank acquired Arm Holdings in 2016 for $32 billion. Softbank’s initial ambition was to set ARM’s valuation at over $60 billion. Even with the lower valuation, the IPO will fetch $4.9 billion for Softbank, which is selling 9.4% of the company’s stock. Post the IPO, the Masayoshi Son-backed Japanese conglomerate will continue to own 90% of the British chip designer.

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