Shares of SoftBank’s Arm Holdings surged around 25 per cent above their Nasdaq listing price on Thursday. The chip designer company’s American Depository shares opened at $56.10 per share, compared with the debut price of $51 per share.
After the robust debut, SoftBank Arm’s share price rallied 24.68 per cent to hit $63.59 per share on the first day of trading, taking the valuation of the British chip designer to $65 billion in its return to public markets after a seven-year absence, according to a Reuters report.
The company bagged a valuation of $54.5 billion on Wednesday after pricing its IPO at the upper end of the marketed range, raising $4.87 billion for SoftBank, which still owns 90.6 per cent stake.
According to a Reuters report, despite a strong performance on Thursday, Arm Holdings’ debut marks a fall from the $64 billion it was valued at last month when SoftBank bought the 25% stake in Arm it did not directly own from its Vision Fund unit.
Market participants said that Arm’s solid performance shows that investor demand for the IPOs, which has been low over the past two years due to geopolitical tensions and higher interest rates, may be on the path of recovery.
Several big companies, including footwear maker Birkenstock, grocery delivery service Instacart, and marketing automation service Klaviyo, are slated to go public in the coming weeks.
Arm’s chip designs power nearly every smartphone in the world, due to which it is indispensible in the tech hardware ecosystem. Last month, the company reported a 1 per cent decline in annual revenue as its two largest markets, smartphones and personal computers, witnessed a slowdown.