(New York) British electronic chip designer Arm is aiming for a valuation close to $52 billion for its debut on the New York Stock Exchange on Thursday, the biggest IPO in nearly two years, according to the price set Wednesday for its shares.
Arm, whose semiconductor models are integrated into 99% of smartphones worldwide, stopped the unit price of the stock listed at $51 from Thursday on the NASDAQ Electronic Stock Exchange, according to a press release published Wednesday.
This is the largest IPO in the world since November 2021 and the arrival on Wall Street of the electric vehicle manufacturer Rivian, valued at $77 billion, at the time.
This price corresponds to the high end of the range initially established by Arm, between $47 and $51, reflecting sustained investor appetite.
The operation was initiated by the Japanese investment company SoftBank Group, majority shareholder, which will sell, on the market, around 10% of the capital of the technological flagship of Cambridge (England).
SoftBank will recover, at least, 4.87 billion dollars, and up to 5.22 billion in the event of exercising the over-allotment option, which allows intermediary banks to acquire 7 million additional securities.
The valuation of Arm is significantly higher than the 32 billion paid by the Japanese to take control of Arm in July 2016, but lower than the 60 to 70 billion dollars that SoftBank was targeting a few weeks ago, according to several media .
The success of the introduction of Arm would constitute a form of redemption for the boss and founder of SoftBank, Masayoshi Son, who has mainly been talked about in recent years for his colossal losses recorded on technological investments.
SoftBank notably suffered several billion dollars in capital losses on its stakes in the fallen king of shared offices WeWork as well as in the capital of the Chinese online commerce giant Alibaba.
The first day of trading, Thursday, will be closely watched, as it is often considered a crucial indicator of the quality of an “IPO” (initial public offering or entry into the stock market).
Full-scale test
The baptism of fire of the British technological flagship is also a life-size test for the IPO market, which has been in hibernation for more than 18 months, weighed down by the monetary tightening of central banks and the tightening of credit conditions.
We have to go back to 1990 to find figures lower than those of the 2022 vintage.
To ensure the success of the project, Arm surrounded itself with no fewer than 27 banks, an unusually high number. The Cambridge (England) company has also secured the support of a group of prestigious clients, from Apple to Nvidia, ready to invest $735 million in its capital.
Already announced on the New York square, behind Arm, the shopping delivery platform Instacart, the online marketing specialist Klaviyo, as well as the manufacturer of the famous Birkenstock sandals, whose application was officially filed on Tuesday.
“Arm is a bit of a special case,” nevertheless argues Jay Ritter, professor at the University of Florida and specialist in IPOs, for whom the group’s stock market trajectory will not necessarily prejudge those of the following ones.
This is, in fact, a company that has dominated its market for several years and generates significant profits, and not a start-up in the development phase, like Instacart or Klaviyo.
For Jay Ritter, some also question the growth potential of Arm, which has already saturated the smartphone market but only produces classic semiconductors, called CPUs, and not graphics processors, or GPUs. , which are the sinews of the artificial intelligence war.