The owner of British chip designer Arm is mulling increasing its IPO price range ahead of its flotation in New York on Wednesday after a surge in investor interest in the company.
Japan-based SoftBank, which took the firm private in 2016, had been eyeing a valuation of $60-70 billion for it earlier this year, before setting Arm’s IPO price at $47-51 a share, giving it a significantly lower market value of $54.5 billion.
But it now looks set to get closer to its original valuation hopes after the share sale was subscribed six times over, according to Bloomberg. No final decision is understood to have been made.
Arm is seeking to raise as much as $4.9 billion from the stock market listing and has tempted investors with the promise of 11% revenue growth this financial year, rising to the mid-20% range in 2025 amid an expected boom in demand for chips used in data and AI.
The attractive projections have roused the interest of tech giants Apple, Alphabet and Nvidia, who are all considering buying a stake in the Cambridge-based company, according to Arm, alongside chip foundry operators Intel, Samsung and TSMC.
Founded in 1990, Arm was previously listed on the London Stock Exchange, where it counted Apple as one of its biggest shareholders. Senior Government officials including Prime Minister Rishi Sunak had fought hard to bring the tech firm’s shares back to the London public markets, but SoftBank snubbed the LSE in search of higher valuations in the US.
In 2020, chipmaker Nvidia made a bid to acquire Arm from SoftBank for $40 billion, but the deal was blocked by competition regulators in the US and UK. Nvidia has since seen its value more than triple to hit a market cap of $1.1 trillion after it said it had seen a surge in demand for chips used in AI technologies.
Arm shares are expected to begin trading in New York from Thursday. The firm is one of SoftBank’s most successful European investments. Its portfolio has also included some high-profile failures, such as collapsed fintech businesses Wirecard and Greensill.
