Arm Holdings Plc’s long-anticipated initial public offering is set to price Wednesday and investors will be watching to see how owner SoftBank Group Corp. fares in what is set to be the largest listing of the year — and whether it helps reignite equity capital markets.
The IPO touches on an array of hot-button issues for tech investors, including potentially excess enthusiasm related to artificial intelligence, as well as geopolitical risks involving China and its role in the chip wars. The offering even includes the world’s most valuable semiconductor company, Nvidia Corp., as a participant.
SoftBank, which acquired Arm seven years ago for $32 billion, has helped grow the chip designer and change its business model. The firm’s investment in Arm hasn’t been all smooth sailing, though.In 2020, SoftBank tried and failed to sell the company to Nvidia for $40 billion. That move angered customers who didn’t want to see Arm, which supplies the foundational technology used by the mobile-phone industry, fall into the hands of a single buyer.
The IPO’s design has been both unconventional and conservative at the same time. SoftBank is only looking to float up to 10% of the shares, which could cause a scramble by investors to get their hands on the stock. Arm is setting aside more than $700 million of the stock in the IPO to be bought by some of its biggest customers, including Intel Corp., Apple Inc., Nvidia, Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co.
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