Arm Holdings Ltd, the chip designer under SoftBank Group Corp’s ownership, is planning to propose a share price range of $47 to $51 during its upcoming initial public offering (IPO), according to individuals with knowledge of the matter. This pricing range, not previously disclosed, would result in Arm being valued at approximately $50 billion to $54 billion, with an IPO offering of $5 billion to $5.4 billion. This valuation would position Arm as the most valuable company to go public in New York since electric vehicle manufacturer Rivian Automotive’s debut in 2021.
The Upcoming Arm IPO
It’s worth noting that SoftBank might consider raising this range before finalizing the IPO price if there’s strong demand from investors, sources said. They requested anonymity due to the confidential nature of the matter. Arm chose not to provide a comment, while SoftBank had not responded to requests for comment at the time of reporting.
The valuation Arm is aiming for represents a decrease from the $64 billion valuation at which SoftBank purchased the remaining 25% stake in the company from its $100 billion Vision Fund just last month. This adjustment reflects a recent decrease in demand for certain Arm products, primarily due to a decline in global smartphone shipments, resulting in Arm’s sales dropping to $2.68 billion for the year ending March 31.
Arm has already secured numerous major clients as investors in its IPO, as reported by Reuters. These prominent investors include Apple Inc., Nvidia Corp, Alphabet Inc., Advanced Micro Devices Inc., Intel Corp, Samsung Electronics Co. Ltd., Cadence Design Systems Inc., and Synopsys Inc. Their interest is driven by a desire to expand their commercial relationship with Arm and ensure that competitors don’t gain an advantage.
Arm’s semiconductor designs are seen as an essential resource by these customers, used by over 260 technology companies to manufacture more than 30 billion chips annually, powering 99% of the world’s smartphones and a wide range of other devices, from small sensors to powerful supercomputers.