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Banks underwriting Arm’s $50 billion listing will close stock orders a day earlier than planned due to strong demand for the biggest initial public offering in nearly two years.
The British chip designer’s initial public offering, which will close on Tuesday instead of Wednesday as scheduled, is more than five times oversubscribed, people familiar with the matter said.
Arm shares are still expected to price on Wednesday and could hit the upper end of the initial range of $47 to $51 per share, or even higher, they added.
At the upper end of that range, the IPO would raise $4.9 billion for Arm’s parent company, SoftBank, and value the company at $54.5 billion on a fully diluted basis. People warned on Monday that prices were still to be determined.
Arm declined to comment.
Strong investor demand for Arm’s listing has helped open the window for a U.S. listing amid a dearth of such deals this year, encouraging other companies to seek public offerings.
On Monday, San Francisco-based e-commerce company Instacart announced a pricing range for its IPO, which could raise up to $616 million. On a fully diluted basis, if all stock options and other rights are exercised, the IPO would value Instacart at as much as $9.3 billion, less than a quarter of its private valuation two years ago.
Marketing automation company Klaviyo also announced IPO pricing on Monday. The company said it would sell 19.2 million shares at a price range of $25 to $27 per share. That would value the company at as much as $6.3 billion. It was last valued at $9.5 billion.
Arm’s current owner, SoftBank, plans to sell its roughly 10% stake in the company through a Nasdaq listing. It initially hoped the deal would value Arm as much as $70 billion.
Although sales were flat in its latest fiscal year, Cambridge-based Arm expects the artificial intelligence boom to drive accelerated revenue growth.
While some investors are worried about Arm’s profit decline in the latest quarter and the multiple risks the company faces in China, demand for its shares remains strong.
Arm’s core market for smartphone chips has stagnated this year, but it hopes artificial intelligence and data center customers will bring growth, although it has only played a limited role in the technology needed to build the large language models that power ChatGPT and other generative AI systems. Peripheral effects.
“AI will be everywhere and it will all run on Arm,” Rene Haas, chief executive of SoftBank’s chip design company, told potential investors in a pitch video seen by the Financial Times express.
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