ARM IPO 10 Times Oversubscribed as Chip Designer Raises $4.9 Billion

Softbank portfolio company Arm successfully raised $4.87 billion ahead of its initial public offering today. Bankers priced the chip designer’s share price at $51 a piece, the end of the $47-$51 pricing range considered by the company, signaling investor appetite for Arm which describes itself as “the foundation of the semiconductor industry.”

Arm’s IPO is the most anticipated stock market listing of the year. A successful listing could revive optimism on the bourse and spur other private tech companies to go public after three years of market volatility skewed expectations.

The semiconductor’s IPO was oversubscribed by more than ten times, Bloomberg reported, suggesting Arm could have priced its shares higher than the original range. However, Softbank chairman Masayoshi Son was unwilling to push things too far, reports suggest.

Arm is poised to take advantage of the artificial intelligence hype that has fueled the jump in the share price of chip maker Nvidia from under $140 in October before the introduction of ChatGPT in November 2022 — which essentially acted like a starter gun for the AI arms race.

As of Sept. 13, Nvidia’s stock now trades above $450, a 225% growth that increased its market value to $1.1 trillion. 

Arm’s IPO price values the semiconductor company at $54.5 billion, slightly below the $64 billion valuation Softbank recorded on its books when it bought back shares of the company from Vision Fund.

Arm will officially start trading on the Nasdaq under the ticker ARM today.