On September 14, SoftBank’s Arm Holdings saw a nearly 25% increase in its stock price above its Nasdaq debut price, sparking optimism among investors for a potential turnaround in the IPO market. The stock opened at $56.10 and closed at $63.59, giving the British chip designer a valuation of $65 billion. This strong performance indicates a potential rebound in investor demand for IPOs, which has been negatively impacted by geopolitical tensions and higher interest rates in recent years. Market participants believe that Arm’s success will have a positive impact on the IPO pipeline, particularly in the AI sector. Several companies, including Instacart, Birkenstock, and Klaviyo, are scheduled to go public in the coming weeks, and their success could trigger a wave of IPO launches in 2022. Despite Arm’s impressive debut, it’s worth noting that it was valued at $64 billion just last month when SoftBank bought the remaining 25% stake from its Vision Fund unit. However, SoftBank CEO Masayoshi Son remains optimistic about Arm’s future prospects. Arm plays a crucial role in the tech hardware ecosystem, with its chip designs powering the majority of smartphones worldwide. The company believes it can increase sales by leveraging its newest technology, which commands a higher royalty rate. While Arm’s strong debut is likely to encourage other technology companies to pursue IPOs, market experts suggest that it does not signal a return to the exuberance of 2021. Certain sectors, such as biotech, may remain dormant until interest rates decrease. Arm’s debut is also beneficial for the Nasdaq, which secured the listing, as it provides short-term publicity and has the potential to boost recurring revenue from annual listing fees.
SoftBank’s Arm soars nearly 25% in market debut to $65 billion valuation
/cloudfront-us-east-2.images.arcpublishing.com/reuters/EWDK36ERMVPHPM7AKPHCNXBIOQ.jpg "SoftBank’s Arm soars nearly 25% in market debut to billion valuation")
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