The long anticipated Arm flotation is set to kick off today with shares being offered to the public at $51 apiece, putting a value on the company of $54.5 billion.
Britain’s chip design and licensing outfit said in a statement that its shares are expected to begin trading on the Nasdaq Global Select Market in New York on September 14 under the symbol ARM.
There has already been huge interest in this IPO, which resulted in Arm closing orders for shares a day earlier than planned this week due to its stock being more than five times oversubscribed, according to the Financial Times. This interest could push the share price higher than the initial $51 once trading begins.
At this price, the IPO is reportedly set to raise about $4.9 billion for Arm’s parent company, Softbank, which is less than the $8-$10 billion the Japanese investment outfit had previously said it hoped to generate. Softbank itself posted a record $39 billion loss earlier this year.
Arm will continue to remain under the control of Softbank after the stock sell off, however, as reported by The Register earlier this year when the chip designer first filed for its public listing. Softbank issued a statement saying that: “SBG (Softbank) intends that Arm will continue to be a consolidated subsidiary of SBG following the completion of the proposed initial public offering.”
The valuation of Arm at $54.5 billion is also lower than the $60-$70 billion that Softbank was said to be aiming for, a figure based on the estimated value of the proposed sale of Arm to GPU maker Nvidia at the time the deal fell through last year. It is still likely to make it the largest IPO in the US this year, however.
That proposed sale fell through due to the “significant regulatory challenges” it faced from authorities in various countries, as well as opposition from other tech companies who feared that Nvidia might limit access to Arm technology for other licensees.
The IPO has instead generally met with broad approval, with many big names in the industry such as Apple, Samsung, and Intel stepping up to take a sizable stake in the Brit chip company.
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This is one reason why the UK government was hopeful that the IPO might be a dual-listing, with Arm shares going up for sale on the London stock exchange as well as New York. Those hopes were dashed earlier this year, when the company confirmed it would list only in the US, blamed by some on financial red tape.
According to Nikkei Asia, the IPO has four lead underwriters, comprising Barclays, Goldman Sachs, JP Morgan, and Mizuho USA. There is also a second tier of banks, including Bank of America and Citigroup. ®