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Arm Holdings, a British chip designer owned by SoftBank, had a strong debut on the Nasdaq stock exchange, with its American Depositary Shares opening at $56.10 each, higher than the initial offering price of $51. The share price then surged by nearly 25% on the first day of trading, closing at $63.59, giving Arm a total valuation of $65 billion. This marked Arm's return to public markets after a seven-year absence.
During its initial public offering, Arm had been valued at $54.5 billion, and the IPO raised $4.87 billion for SoftBank, which still maintains a 90.6% stake in the company. Notably, this valuation was lower than the $64 billion at which SoftBank had recently valued Arm when it purchased the remaining 25% stake from its Vision Fund unit.
Arm's successful debut suggests renewed investor interest in IPOs, which had been impacted by geopolitical tensions and rising interest rates over the past couple of years. Other companies, such as Instacart, Birkenstock, and Klaviyo, are also planning to go public in the coming weeks.
Arm plays a crucial role in the tech hardware industry, with its chip designs powering the majority of smartphones worldwide. However, the company revealed a 1% drop in annual revenue recently due to slowdowns in its two largest markets, smartphones and personal computers.
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