(New York) The stock of British microprocessor designer Arm gained nearly 25% on Thursday during its first trading session, a success for the largest IPO in almost two years.
After starting its journey at 56.10 dollars (10%), the action gained as much as 30%, before closing at 63.59, or 24.69% more than the 51 dollars held on Wednesday by Arm as introductory price. The latter was already at the high end of the initial range, between $47 and $51.
On Thursday, after the bell, the British flagship was valued at $65.2 billion, and even 67.9 when counting the securities allocated to employees and managers.
The first day of trading often sets the tone for a company’s stock market performance during its first months on the market.
This is the largest IPO in the world since November 2021 and the arrival on Wall Street of electric vehicle manufacturer Rivian, valued at $77 billion at the time.
It is a victory for Masayoshi Son, boss of SoftBank Group, majority shareholder of Arm, who had been judged too greedy for having targeted a valuation of between 60 and 70 billion.
The success of the introduction of Arm represents a form of redemption for the Japanese entrepreneur, who has mainly been talked about in recent years for his colossal losses recorded on technological investments.
SoftBank notably suffered several billion dollars in capital losses on its stakes in the fallen king of shared offices WeWork as well as in the capital of the Chinese online commerce giant Alibaba.
At the origin of this reintroduction, SoftBank chose to sell only around 10% of the capital, and has already recovered 4.8 billion dollars, a total which could go up to 5.2 billion in the event of exercise the over-allotment option, which allows intermediary banks to acquire additional securities.
This ranks the deal as the 17th largest IPO ever in the United States.
As for the balance of shares, Masayoshi Son indicated on CNBC on Thursday that he intended to keep it. “I want to keep as much as possible, for as long as possible,” he said.
The fact that SoftBank remains the owner of around 90% of the shares could make Arm a volatile stock on the stock market, where it is more difficult to find a seller or a buyer when the float (number of shares in circulation) is limited.
“We are delighted to go public today, happy for all our employees, our partners and our developers,” Arm CEO Rene Haas said on CNBC.
It’s a return to the stock market for Arm, which already made a first run on the stock market from 1998 to 2016, before its takeover by SoftBank, for $32 billion.
Arm’s baptism of fire was also a life-size test for the IPO market, weighed down by central bank monetary tightening and tightening credit conditions.
You have to go back to 1990 to find figures lower than those of the 2022 vintage.
“It’s been 18 months since we had a real introduction, and it’s been a success,” summarized Art Hogan, analyst at B. Riley Wealth Management.
To ensure the success of the project, Arm had secured the support of a group of prestigious clients, from Apple to Nvidia, ready to invest $735 million in its capital.
Behind Arm, the shopping delivery platform Instacart, the online marketing specialist Klaviyo, as well as the manufacturer of the famous Birkenstock sandals, whose application was officially filed on Tuesday, have already been announced on the New York market.
