SoftBank’s Arm targets $52B valuation in 2023's biggest IPO

Largest initial public offering in New York since Rivian in 2021

SoftBank Group's Arm wants a valuation of more than $52 billion in its initial public offering (IPO), the chip designer said on Tuesday.

SoftBank, a Japanese conglomerate, is offering 95.5 million American depository shares of the United Kingdom-based Arm for $47 to $51 each and is aiming to pull in $4.87 billion on the high end, according to a regulatory filing.

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SoftBank will own 90.6% of Arm's ordinary shares after the offering closes, the company said, while not receiving any proceeds from the IPO.

SoftBank

Pedestrians walk past a SoftBank Group Corp. store in Tokyo Tuesday, July 19, 2016. (Akio Kon/Bloomberg via Getty Images / Getty Images)

The IPO market has been slowed by inflation and the Federal Reserve’s interest hikes since 2021, falling from 1,035 initial public offerings that year to just 181 in 2022.  Meanwhile, Arm's listing marks the biggest in New York since Rivian in late 2021.

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"IPOs are a sign of economic and market optimism because they represent increased risk taking by investors," Quincy Krosby, chief global strategist at LPL Financial, told FOX Business. "When the IPO market is fully restored, it is typically associated with a ‘risk on’ market that is underpinned by easier financial conditions," he added. "For the average consumer who is invested in the market, either via an IRA or 401(k) plan, for example, overall market conditions are typically positive."

SoftBank Group

Investors in Arm’s IPO include names like Apple, Nvidia, Alphabet, Advanced Micro Devices and Intel. (Photo by KAZUHIRO NOGI/AFP via Getty Images)

Investors in Arm’s IPO include Apple, Nvidia, Alphabet, Advanced Micro Devices and Intel.

Ticker Security Last Change Change %
AAPL APPLE INC. 218.54 -6.47 -2.88%
NVDA NVIDIA CORP. 114.25 -8.34 -6.80%
GOOGL ALPHABET INC. 172.63 -9.16 -5.04%
AMD ADVANCED MICRO DEVICES INC. 144.63 -9.37 -6.08%
INTC INTEL CORP. 31.70 -1.25 -3.79%

Arm said the "cornerstone investors" have separately indicated an interest in buying a combined $735 million of the ADS being sold.

SoftBank's Arm latest IPO

SoftBank Group Corp. CEO Masayoshi Son speaking in Tokyo during a virtual earnings announcement, arranged in Naha, Japan, on Tuesday, Feb. 8, 2022. (Kentaro Takahashi/Bloomberg via Getty Images / Getty Images)

Arm, which has tapped a total of 28 banks for the IPO, has not picked a traditional "lead left" bank and will split underwriter fees evenly among the top four banks.

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Arm expects to trade on the Nasdaq Global Select Market under the symbol "ARM."

Reuters contributed to this report.

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