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SoftBank CFO Yoshimitsu Goto and Arm Holdings CEO Rene Haas pose for a photo at the Nasdaq MarketSite on September 14, 2023 in New York City.
Michael M. Santiago | Getty Images
Shares of chip design company Arm Holdings started trading on the Nasdaq Thursday morning in a long-anticipated IPO at a share price of $56.10, valuing the company at $59.9 billion.
Arm Holdings sold around 95.5 million shares on the Nasdaq. Softbank, which took the company private in 2016, will control around 90% of Arm’s shares outstanding.
On Wednesday, the company was priced at the upper end of its expected range, at $51 per share. Thursday’s opening trading price was 10% over its debut price.
The company will trade under the ticker “Arm.”
It’s a hefty premium for the British chip company. At a $54 billion valuation, Arm’s price-to-earnings multiple would be about 104 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% current-quarter growth forecast.
In a presentation to investors, Arm said it expects the total market for its chip designs to be worth about $250 billion by 2025, including growth in chip designs for data centers and cars. Arm’s revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion.
Arm’s critical customers, including Apple, Google, Samsung and TSMC, are expected to buy shares in the offering. That’s a testament to Arm’s influence on the global semiconductor industry.
In an interview with CNBC on Thursday, SoftBank CEO Masayoshi Son emphasized how Arm technology is used in artificial intelligence chips, seeking to tie the firm to the recent boom in machine learning. He also said the he wanted to keep the company’s remaining Arm stake as long as possible.
The debut could kick open the market for technology IPOs, which have been paused for nearly two years. It’s the biggest technology offering of the year.
This is breaking news. Please check back for updates.
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