SoftBank’s Arm to make Nasdaq debut as biggest US IPO since 2021, valuing the chip design startup at $54.5 billion

The wait is over. After many months of anticipation, the blockbuster initial public offering (IPO) for SoftBank-owned chip design startup Arm is finally here. Arm is set to debut on the Nasdaq on Thursday, September 14, 2023.  The IPO is poised to be one of the largest in the US since 2021, with Arm aiming to raise approximately $21.8 billion and attain a valuation of $54.5 billion.

The news of the IPO comes just a week after SoftBank said it has managed to attain a valuation of $54.5 billion by setting the offer price at $51 per American Depositary Share, which is right at the upper limit of the projected range, Reuters reported.

It’s interesting to note that seven years ago, SoftBank took Arm private for $32 billion. Since around 2020, SoftBank has been exploring options to offload a portion of its Arm stake. This intention became evident when SoftBank signed a substantial $40 billion deal with chip manufacturer Nvidia for Arm.

Investors are likely to show strong interest in the IPO, given Arm’s status as a leading chip designer with a diverse client base, including tech giants like Apple, Samsung, and Google.

This IPO carries significant implications. It’s not only a test for the sluggish US IPO market but also marks Arm’s return to the public markets after SoftBank took it private in 2016 for $32 billion. The offering presents an opportunity for SoftBank to recover some of its investment in Arm, which could be a significant boost for the company, as it seeks to improve its overall performance.

Moreover, Arm’s IPO is a noteworthy event for the semiconductor industry, as the company is a prominent chip designer with its technology embedded in countless devices worldwide. It underscores the industry’s resilience and continued significance in the global economy.

Earlier this year, Arm turned down a proposal from the British government to list its shares on the London Stock Exchange and opted to pursue a flotation on a U.S. exchange instead.

In 2016, SoftBank acquired Arm for $32 billion, marking the largest-ever purchase of a European technology company up to that point. SoftBank’s strategic move was driven by the aim to establish a presence within the burgeoning Internet of Things (IoT) sector. Although IoT represents only a fraction of Arm’s overall business, during that time, it held significant attention in the tech world.

Arm’s influence extends beyond just wearables and smart home devices; the company has diversified its semiconductors into various applications, including the realm of connected cars.

Founded in 1990, Arm was originally initiated as a collaborative effort involving Acorn Computers, Apple (then known as Apple Computer), and VLSI Technology. The company made its debut on both the London Stock Exchange and Nasdaq in 1998. However, in 2016, SoftBank acquired Arm, taking it private in a deal valued at $32 billion.