UK-based chip designer Arm made a remarkable debut on the Nasdaq on Thursday, with its shares soaring 25% higher by the end of the trading day. The company, valued at approximately $65 billion following its initial public offering (IPO), started trading in New York with 95.5 million shares under the ticker ‘ARM’.
The trading price opened at $56 per share, already surpassing the initial offering price by 10%, and closed at an impressive $63.59. This IPO marks the largest of the year and the largest since the electric truck manufacturer Rivian in 2021.
SoftBank, the company that acquired Arm for $32 billion in 2016, will retain about 90% of the chip designer’s shares. Arm plays a pivotal role in the production of smartphones, laptops, video games, televisions, and GPS units. Powerhouse companies such as Apple, Samsung, Nvidia, and Google rely on Arm’s designs and instructions for their own chips.
More than a few prominent companies, including Apple, Google, Nvidia, AMD, Samsung, and TSMC, have expressed interest in becoming cornerstone investors in Arm’s IPO. This level of interest further underscores the industry’s recognition of Arm’s significance and its potential for growth.
The lead underwriter in this highly anticipated IPO is Goldman Sachs. However, the investment bank’s revenue in investment banking declined by 20% in the second quarter of 2023, adding additional pressure to deliver a successful offering.
Arm’s successful IPO could have broader implications as experts believe it may open the floodgates for a wave of new IPOs, boosting market sentiment and contributing to the overall positive growth of the stock market.
Arm’s impressive debut on the Nasdaq demonstrates the growing demand for its innovative chip designs and the confidence investors have in its future prospects. As the tech industry continues to evolve at a rapid pace, Arm’s position as a leading chip designer puts it in a favorable position to capitalize on future market trends and drive further industry advancements.
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