Price Update: Arm Reaches for $47-51 Stock Pricing for IPO

As anticipation builds, Arm has released more pricing details ahead of what is to be the biggest initial public offering (IPO) of the year.

The chip designer filed an updated F1 filing with the Securities and Exchange Commission on September 5. The firm will list 95.5 million ordinary shares under the ticker “ARM,” targeting a price range between $47 and $51.

Although the company has not specified an exact date for the IPO, it is widely expected within this month. Bloomberg earlier reported arm management would likely price its shares on September 13, with trading to occur the following day. IPOScoop also lists its expected launch date as September 14.

There is a lot of buzz building on Wall Street around Arm’s IPO, mainly owing to the firm’s focus on microchips and semiconductors used in artificial intelligence (A.I.), the burgeoning technology that has driven much of this year’s stock rally.

Arm has long been dominant in the semiconductor industry. The firm claims that its eponymous computer processing unit (CPU) architecture is the world’s most widely used computing architecture. “Our CPU designs have the world’s richest software ecosystem, built in partnership with the leading operating systems provider(s),” reads its prospectus.

Arm is coming off the back of strong sales numbers. The firm reached record revenues totaling $2.8 billion last year, with its sales growing 5.7% in the year to March.

Softbank Strategy

The public floating of Arm is part of a revival effort by Softbank. The world’s largest venture capital fund has been hit hard by staggering losses in recent years.

Arm has proven to be one of Softbank’s most successful acquisitions. The firm, which profits from licensing its proprietary technology to chip makers, has expanded its revenue by around 70% since 2016, when Softbank took it over.

Some of its other big bets have been catastrophic flops, such as WeWork, now synonymous with the excesses of tech bro bravado and Silicon Valley’s utopianism.

In shoring up its imminent launch, Softbank has invited some of Arm’s biggest customers to get in on the deal. Apple, Nvidia, Intel, and Samsung Electronics are all confirmed as strategic investors.

Yet the lion’s share will remain with Softbank. The fund plans to retain 90% of Arm’s shares, it said in the filing. Due to this unwillingness to float more of the company’s ownership, the deal will likely fall just short of $5 billion, although it had previously been expected to reach almost double that.

Despite this, it will still be the biggest deal of the year. Johnson & Johnson’s spinoff Kenvue Inc., the next largest listing so far in 2023, hit $4.37 billion in May.

Investors won’t have to wait much longer to grasp this deal – Arm is almost within reach.

Previously published at Wealth of Geeks.

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