Arm Holdings will debut trading on the Nasdaq Thursday after pricing its highly-anticipated IPO, the biggest new listing in two years, as the high end of its target range at a level that values the chip designed at around $55 billion.
Arm, which is owned by Japan's tech investing giant SoftBank, unveiled its original IPO pricing last week when it revealed a price range of between $47 and $51 per share, a level that would value the U.K-based firm at around $54.5 billon.
Arm said late Wednesday it would sell 95.5 million shares at $51 each and raise around $4.87 billion with SoftBank holding around 90.6% of Arm's ordinary shares upon completion.
The pricing makes Arm's listing on the Nasdaq the biggest IPO since Rivian Automotive in 2021, but still represent a significant reduction to the $64 billion valuation Arm carried earlier this year when SoftBank arranged to buy the 25% stake in the chipmaker that it didn't directly own from the Saudi Arabia-backed Vision Fund.
"After a nearly two-year drought in the IPO market, SoftBank is wasting no time by offering Arm Holdings to the public markets, and at a valuation that is completely disconnected from the company’s fundamentals," said New Constructs analyst David Trainer.
"Even a roughly $49 billion valuation implies that the company needs to grow its revenue by over 20% compounded annually every year for the next decade, which is a highly unlikely scenario, even for a company like Arm Holdings that is profitable and is in an industry with plenty of growth ahead," he added.
Demand for the chipmaker, which counts Nvidia (NVDA) -) and Apple (AAPL) -) as two of its key financial backers, has lead to speculation that its shares will trade firmly higher when the begin to change hands on the Nasdaq later today.
SoftBank, which last year failed to complete a $40 billion sale of the U.K-based chipmaker to Nvidia NVDA amid pushback from competition authorities in the U.S. and Europe, spurned the British government in March by opting to pursue a U.S.-only listing.
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