Hot Chips
The ARM IPO could help thaw the frozen market for new listings, both in the US and Australia.
The biggest IPO in the US in nearly two years priced this morning, and one way or another the ripple effects will be felt in Australia.
ARM, the UK chip designer owned by Japanese telco turned tech investor Softbank, sold USD4.87 billion ($7.55 billion) worth of shares in a deal that values the company at USD54 billion. The raise was priced towards the top of the indicated range, a sign of healthy demand, although we won’t really know that is enduring until the stock starts trading tonight (and even still, it would probably be wise to reserve judgement on that for a while yet).
Still, ARM is almost the perfect type of company to IPO at the moment, and a fitting candidate to thaw the frozen market for new listings. There haven’t been many of them this year, but another two sizeable deals are expected in the US over the next couple of weeks — Instacart, the grocery delivery business, and marketing automation firm Klaviyo.
ARM has been around since the 90s and was previously listed on the London Stock Exchange before Softbank acquired it in 2016. It designs components for semiconductors that it licences to the likes of Apple, Samsung and Nvidia and is therefore exposed to one of the biggest themes in the market right now, the AI boom.
