Arm's $4.87 Billion IPO in 2023: The Largest U.S. Tech Offering This Year

Arm, the UK-based semiconductor design powerhouse, is preparing to launch the largest U.S. initial public offering (IPO) of 2023, targeting a fundraising amount up to $4.87 billion. This IPO could value Arm at an impressive $52 billion, marking a significant milestone in the tech sector.

Highlights of Arm's 2023 IPO

• Arm plans to list 95.5 million American Depositary Shares (ADSs) on Nasdaq, priced between $47 and $51 per share.
• This offering would surpass Johnson & Johnson's Kenvue spinoff as the biggest U.S. IPO so far this year.
• Arm’s semiconductor designs are critical to over 260 technology companies, powering 99% of the world’s smartphones with 30 billion chips annually.

Arm’s IPO: A Landmark Event in the Nasdaq History

The anticipated $4.49 to $4.87 billion raised positions Arm’s IPO as the third-largest in Nasdaq history, trailing only Facebook’s $16 billion IPO in 2012 and Rivian Automotive’s nearly $12 billion offering in 2021. Post-IPO, Arm is expected to have over a billion shares outstanding, solidifying its valuation near $52 billion at the upper price range.

SoftBank’s Dominance and Industry Giants’ Interest

Since SoftBank acquired Arm for $32 billion in 2016, it has maintained majority control, holding 90.6% of shares after the IPO. Consequently, less than 10% of shares will be publicly traded. Leading tech companies including AMD, Apple, Google, Intel, Nvidia, TSMC, and Samsung have shown strong interest in purchasing shares, collectively eyeing investments up to $735 million.

Arm’s semiconductor designs are indispensable assets for the tech ecosystem, enabling the manufacture of billions of chips annually. This critical role fuels intense competition among industry leaders to secure stakes in Arm’s promising future.

Revitalizing the U.S. IPO Market

Amidst a challenging IPO environment marked by economic uncertainty and reduced market activity, Arm’s high-profile offering is poised to inject fresh momentum into the U.S. IPO landscape. While IPO volumes and proceeds have declined sharply since 2021, this landmark deal could signal renewed investor confidence and invigorate market participation.

In the first half of 2023, the U.S. saw 63 IPOs raising $10.1 billion, a modest recovery from the previous year but still far below the 2021 peak of 416 IPOs and $155.8 billion raised, according to EY.

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