Arm Shares Soar 25% in Largest IPO Since Rivian

Arm's Successful Nasdaq Debut

After a nearly two-year drought in the IPO market, UK-based chip designer Arm made a triumphant debut on Nasdaq, finishing the day 25% higher and achieving a market cap of approximately $65 billion.

Impressive Performance

Arm began trading in New York on Thursday afternoon under the ticker 'ARM' (ARM). The trading session commenced at $56 per share, already 10% above its initial price offering, and closed at $63.59. This remarkable performance marks the largest initial public offering (IPO) of the year, surpassing even electric truck maker Rivian's IPO in 2021.

SoftBank Retains Majority Ownership

SoftBank, which acquired Arm for $32 billion in 2016, will maintain ownership of about 90% of the company's shares, indicating its confidence in Arm's future prospects.

Arm's Ubiquitous Presence

While Arm may not be a household name for many Americans, its products are an integral part of daily life. Tech giants like Apple, Samsung, Nvidia, and Google rely on Arm's designs and instructions to create their chips. The company's contributions are essential in the production of smartphones, laptops, video games, televisions, and GPS units.

Strong Investor Interest

Companies such as Apple, Google, Nvidia, AMD, Samsung, and TSMC have expressed interest in acting as cornerstone investors in Arm's IPO, according to a recent filing. This interest reflects the confidence of industry leaders in Arm's technology and future growth.

Positive Outlook from Arm CEO

Arm CEO Rene Haas expressed his satisfaction with the IPO's outcome, stating, "We're very happy about today...Our bankers say if you can price at the high end of the range and go out of that number, it's a good thing. That's where we ended up, and we couldn't be more pleased."

Boosting the IPO Pipeline

The IPO market has experienced a lull due to recessionary concerns and high interest rates. Arm's successful listing is seen as a positive sign for the tech industry and other companies waiting to go public. Wall Street views Arm's IPO as a potential catalyst for future tech IPOs, as it could inspire other healthy companies to make their public debut.

Positive Implications for the Stock Market

Experts believe that if Arm's IPO continues to perform well, it could pave the way for a wave of new IPOs. This influx of new offerings would inject positive sentiment into the stock market, which has been grappling with uncertainty in recent times.

Goldman Sachs' Role

Goldman Sachs serves as the lead underwriter in Arm's IPO, and the bank's shares closed approximately 2.9% higher on Thursday, reflecting the positive outlook for this significant market event.

The successful debut of Arm on Nasdaq signals a potential revival in the IPO market and sets a positive tone for tech companies and investors alike.