Arm soars 25% in biggest IPO of the year
The performance of the British chip designer's shares indicates that the IPO. the market could rebound after a very quiet year.
Call it Groundhog Day on Wall Street.
When shares of Arm, the British chip designer, began trading on the Nasdaq stock exchange on Thursday in the biggest IPO of the year. Investors, technology executives, bankers and start-up founders closely watched its performance.
If Arm's shares fell, they knew the market IPOs would likely remain frozen for longer. But a warm reception for the shares would likely mean many more companies going public in the coming months, ending the cold streak.
They quickly got their answer: It was an early start. spring. Arm's shares debuted at $56.10, up 10% from their initial offering price of $51. Shares quickly climbed further, rising 25% by the end of the session to close at $63.59 and giving the company a fully diluted valuation of $67.9 billion.
This is positive news for the quotes. of grocery delivery startup Instacart and ad tech company Klaviyo, which are expected to go public next week. It also provides a boost to the entire technology industry, which has been waiting for almost two years for market conditions to improve.
“ Deals like this are often beacons in trying to decipher what the general sentiment is in this market,” said David Hsu, professor of management at the Wharton School at the University of Pennsylvania.
Arm's debut could encourage other companies to tap public markets, he said. "If you can break a logjam in an important sector of this private market, that will tend to trickle down to the providers of private capital."
Arm is the largest company to brave the public markets in 2023, a year that has been almost deathly quiet for IPOs. The chip designer, which is owned by SoftBank, had valued its offer on Wednesday at $51 per share, raising $4.87 billion.
This stands out at the price in a year that was the worst for IPOs since 2009, according to an analysis by EquityZen, a private company stock market. So far this year, 73 U.S. IPOs, including Arm, have raised $14.8 billion, according to Renaissance Capital, which tracks public offerings. That's just a fraction of 2021's listings, when 397 companies raised $142 billion.
There is a backlog of about 200 companies that should have been IPOs by then, according to a study. analysis by PitchBook, which tracks start-ups. Shoe company Birkenstock, owned by private equity firm L Catterton, filed for its IPO on the New York Stock Exchange this week.
« Many companies are exploring the market right now,” said Kyle Stanford, an analyst at PitchBook. “The demand is there. »
Arm constitutes a particularly interesting test of the public market because it offers an essential technology, coveted geopolitically and strategically, which also requires it to face challenges.< /p>
Founded in 1990 in Cambridge, England, the company...
The performance of the British chip designer's shares indicates that the IPO. the market could rebound after a very quiet year.
Call it Groundhog Day on Wall Street.
When shares of Arm, the British chip designer, began trading on the Nasdaq stock exchange on Thursday in the biggest IPO of the year. Investors, technology executives, bankers and start-up founders closely watched its performance.
If Arm's shares fell, they knew the market IPOs would likely remain frozen for longer. But a warm reception for the shares would likely mean many more companies going public in the coming months, ending the cold streak.
They quickly got their answer: It was an early start. spring. Arm's shares debuted at $56.10, up 10% from their initial offering price of $51. Shares quickly climbed further, rising 25% by the end of the session to close at $63.59 and giving the company a fully diluted valuation of $67.9 billion.
This is positive news for the quotes. of grocery delivery startup Instacart and ad tech company Klaviyo, which are expected to go public next week. It also provides a boost to the entire technology industry, which has been waiting for almost two years for market conditions to improve.
“ Deals like this are often beacons in trying to decipher what the general sentiment is in this market,” said David Hsu, professor of management at the Wharton School at the University of Pennsylvania.
Arm's debut could encourage other companies to tap public markets, he said. "If you can break a logjam in an important sector of this private market, that will tend to trickle down to the providers of private capital."
Arm is the largest company to brave the public markets in 2023, a year that has been almost deathly quiet for IPOs. The chip designer, which is owned by SoftBank, had valued its offer on Wednesday at $51 per share, raising $4.87 billion.
This stands out at the price in a year that was the worst for IPOs since 2009, according to an analysis by EquityZen, a private company stock market. So far this year, 73 U.S. IPOs, including Arm, have raised $14.8 billion, according to Renaissance Capital, which tracks public offerings. That's just a fraction of 2021's listings, when 397 companies raised $142 billion.
There is a backlog of about 200 companies that should have been IPOs by then, according to a study. analysis by PitchBook, which tracks start-ups. Shoe company Birkenstock, owned by private equity firm L Catterton, filed for its IPO on the New York Stock Exchange this week.
« Many companies are exploring the market right now,” said Kyle Stanford, an analyst at PitchBook. “The demand is there. »
Arm constitutes a particularly interesting test of the public market because it offers an essential technology, coveted geopolitically and strategically, which also requires it to face challenges.< /p>
Founded in 1990 in Cambridge, England, the company...
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