Arm Holdings Plc priced its initial public offering at the top end of its range to raise $4.87 billion in the largest listing of the year, one that could give a major lift to long-suffering equity markets.
The chip designer, which is owned by SoftBank Group Corp., sold 95.5 million American depositary shares for $51 apiece, according to a statement Wednesday confirming an earlier Bloomberg News report. Arm had marketed the shares for $47 to $51 each.
At the IPO price, Arm is valued at about $54.5 billion, according to Bloomberg News calculations. Underwriters have the option of buying as many as 7 million additional shares.
While Arm had previously aimed to raise $8 billion to $10 billion, that target was lowered at least in part because SoftBank decided to buy the roughly 25% stake held by its Vision Fund and then hold onto a larger portion of the shares in the company. After the IPO, SoftBank will still control about 90% of the company’s shares, Arm said in its filings with the US Securities and Exchange Commission.
Arm was setting aside more than $700 million of the stock in the IPO to be bought by some of its biggest customers, including Intel Corp., Apple Inc., Nvidia Corp., Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co.
The offering is being led by Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mizuho Financial Group Inc.
LLC is also acting as financial adviser in connection with the IPO.
The shares are expected to begin trading Thursday on the Nasdaq Global Select Market under the symbol ARM.
The IPO is the world’s biggest this year, surpassing the $4.37 billion listing by Johnson & Johnson consumer health spinoff Kenvue Inc. Arm’s IPO could also be a catalyst for IPOs from dozens of tech startups and other companies whose plans to go public in the US have been stuck during the deepest, longest listing trough since the financial crisis in 2009.
Online grocery-delivery firm Instacart Inc., marketing and data automation provider Klaviyo, Vietnam-based internet startup VNG Ltd. and footwear maker Birkenstock Holding Ltd. have all filed to go public.
SoftBank, which acquired Arm seven years ago for $32 billion, has helped grow the chip designer and change its business model.
Arm — which is a key part of the chip supply chain, designing semiconductors found in most of the world’s smartphones — earlier had sought to be valued at $60 billion to $70 billion in the IPO. SoftBank’s Vision Fund transaction valued Arm at more than $64 billion, based on Arm’s filings.
A successful debut by Arm would provide a windfall for SoftBank founder Masayoshi Son, whose Vision Fund lost a record $30 billion last year.
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Masayoshi Son, chairman and chief executive officer of SoftBank Group Corp., stands to collect a windfall from Arm’s IPO.
Arm’s target valuation reflects a belief that it will benefit from the stampede toward artificial intelligence chips and generative AI — an industry shift that has helped give Nvidia a market value of more than $1.1 trillion.