On Thursday, English chipmaker Arm debuted on the stock market and began at $56.10 in evening trading. At the start of trading Arm’s shares rose 10% and in just half an hour it jumped over 20%, Shares had a value of $51 per share before to the IPO.
The company started trading with a $54.5 billion value, but its market value already exceeds $60 billion. The chipmaker’s debut is the most significant IPO that the stock exchange has seen since 2021’s IPO boom, which ended in collapse in 2022.
Since then, the IPO market not performing well, until it heated up with the IPOs of Mediterranean restaurant CAVA (chain Cava) and beauty company ODD (Oddity), and with Arm’s debut and the newest register of Kaviyo and Cart (Instacart).
On Thursday, Miller Tabak strategist Matt Maley said ahead of the IPO that it would be a lot more important than people feel, if Arm provides well, it will undoubtedly help to revive a market that has been inactive for more than a year. It will also tell us more about the whole AI’s circumstances. There’s still a lot of excitement about it, but not quite as much as before.
However, just because these IPOs are progressing does not mean that their prices aren’t a source of discussion. In the story of Arm, the business reportedly targeted an estimated value of $60 billion to $70 billion.
In a similar way, Instacart which had a value of $39 at the end of its 2021 raising funds round and now it seen at $9.3 billion value.
Arm is a different company, specifically compared to other tech companies. Arm’s customers as a chip designer include some of the most prominent companies in technology, such as Apple.
Arm provides chip designs to a wide range of semiconductor companies, including the processor designs found in nearly every mobile phone today. Arm does not produce chips.
ARM New Strategy
Securities managing director of Rainmaker, Greg Martin told it is one of those companies for that we are very careful. Moreover, he said It is clearly a common semiconductor design in 99% of our cell phones. It did not expand last year, but it has tremendous potential for artificial intelligence.
Moreover, the API company has gone through a number of changes in the past years. Softbank bought Arm in 2016 and moved it to private for about $30 billion. In 2021, Nividia also wanted to buy Arm but the deal fell apart after nearly a year and a half of legal wrangling.
In recent years, Arm has changed its income model by changing prices and introducing new customer licensing methods.
Maley said that Arm brings a small change to their focus from cell phones and goes towards artificial intelligence and he thinks it is a very good strategy.
Concluded that, on Thursday, Arm’s return to the stock market was a high-stakes event. Maley also said if an IPO occurs flat, it might cause problems for the tech sector as a whole. On the other side, if Arm performs well, it may help the technology industry which has been trading sideways zone for the past of months.
According to the IPO prospectus, a group of famous technology companies, like Google, TSM (Taiwan Semiconductor), Intel, AMD ( Advance Micro Devices), Apple, and Nvidia, have indicated interest in purchasing up to $735 million of the offering at the IPO price.