Arm IPO price set at $51 per share... SoftBank raises $4.9 billion

IPO Subscription Competition Rate 10 to 1
Offering Price Set at Highest Level
Corporate Value Expected to Reach $54.5 Billion

The offering price for Arm, a UK-based semiconductor design company preparing for a Nasdaq listing in the US, has been set at $51 per share. With the offering price set at the top end of the desired range, Japan's SoftBank, which invested in Arm, will be able to raise approximately $4.87 billion (about 6.3657 trillion KRW). As Arm's listing, the largest in the US IPO market, proceeds smoothly, there are also voices expecting revitalization of the US IPO market.

Rene Haas, Arm CEO
Photo by Reuters Yonhap News

According to the Wall Street Journal (WSJ) and Bloomberg on the 13th (local time), Arm finalized the offering price at $51 per share on that day. This corresponds to the top end of the desired price range of $47 to $51 that Arm had submitted to the US Securities and Exchange Commission.

As a result, Arm's corporate value is estimated to reach $54.5 billion. This is the largest scale on the New York Stock Exchange since electric vehicle maker Rivian's $13.7 billion listing in 2021. However, it is lower than the corporate valuation of $64 billion that SoftBank set when purchasing a 25% stake in Arm from Saudi Arabia's Vision Fund. SoftBank, which owns all of Arm's shares, plans to sell about 10% of the company's shares through this IPO, raising approximately $4.87 billion.

Arm's high offering price is analyzed to be influenced by strong investor demand. With subscription competition exceeding 10 to 1, investment demand surged, leading Arm to close subscription applications a day earlier than originally planned on the 12th. Regarding this, WSJ also reported on the afternoon of the 13th that Arm held an executive meeting and could finalize the offering price at $52.

The boom in artificial intelligence (AI) development, which is expected to increase demand for semiconductors, was also reflected. Arm is a company that holds core technology in semiconductor design, which acts as the 'brain' of IT devices such as PC central processing units (CPUs) and smartphone application processors (APs). About 260 companies, including Amazon, Alphabet, Qualcomm, and AMD, use chips designed by Arm.

There are also forecasts that Arm's listing will act as a catalyst for revitalizing the overall US IPO market. Companies that postponed their listings due to the economic downturn are expressing intentions to challenge re-listing again in the second half of this year. On the same day, German shoe manufacturer Birkenstock submitted an IPO application to the US Securities and Exchange Commission (SEC). Marketing automation platform Klaviyo and grocery delivery company Instacart are aiming for listings in the fall and the end of this year, respectively.

Bloomberg stated, "Since the 2008 global financial crisis, the US IPO market has experienced its longest downturn," and predicted, "Arm will be a catalyst leading IPO challenges from Silicon Valley startups and other companies."

This content was produced with the assistance of AI translation services.