'IPO Daeeo' Arm Lists on Nasdaq...Double-Digit Surge Intraday on First Day

Arm, a UK semiconductor design company regarded as a major player in the US IPO market this second half of the year, is recording double-digit gains during trading on its Nasdaq debut on the 14th (local time). This is seen as a revival signal for the IPO market, which had frozen due to the Federal Reserve's (Fed) aggressive tightening measures.

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On the Nasdaq market that day, Arm's stock opened at $56.10 per share, 10% higher than the offering price of $51. Within less than 30 minutes, it surged more than 20%. At one point during the session, Arm's stock price reached $61.99 per share. As of 2:50 PM, the stock is trading around $58 to $59 per share, up about 15%. Arm's CEO, Rene Haas, said in a foreign media interview that morning, "The goal was to reach the top end of the (offering price) range," adding, "It is a very good result. Everyone is satisfied."

Arm is recognized as a leader in the mobile application processor (AP) field used in smartphones. Most mobile APs produced by Samsung Electronics, Apple, Qualcomm, and others use Arm's basic design. This unique position, combined with the excitement around the artificial intelligence (AI) boom, is credited with driving the successful IPO.

Based on the opening price, Arm's market valuation approaches approximately $60 billion (about 79.74 trillion KRW). This is the largest on the New York Stock Exchange since electric vehicle maker Rivian's $13.7 billion IPO in 2021. Although it is less than the $64 billion valuation set when SoftBank purchased a 25% stake in Arm from the Saudi Arabia Vision Fund, it exceeds recent market expectations of $45 to $50 billion and the $54.5 billion valuation based on the offering price. SoftBank, led by Chairman Masayoshi Son, acquired Arm in 2016 for $32 billion.

SoftBank, which owns all of Arm's shares, sold about 10% of its stake in this IPO, raising $4.87 billion (about 6.5 trillion KRW). Ten major IT companies, including Samsung Electronics, AMD, Apple, Cadence, Google, Intel, MediaTek, Nvidia, Synopsys, and TSMC, participated as cornerstone investors. Most of these are Arm's largest customers. Chairman Masayoshi Son emphasized in an interview with CNBC how Arm's technology is used in AI chips, also boosting the stock price. He also expressed SoftBank's desire to hold onto Arm's shares for as long as possible.

The Wall Street Journal (WSJ) reported, "Not only investors but also companies preparing for IPOs and Wall Street firms earning huge fees from IPOs breathed a sigh of relief," calling it "a signal heralding the revival of the IPO market."

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This intense interest surrounding Arm is expected to positively impact grocery delivery company Instacart and marketing automation platform Klaviyo, which are lined up for IPOs. These companies plan to set their offering prices next week. German shoe manufacturer Birkenstock and Vietnam-based internet startup VNG are also preparing for US listings.

Ross Gerber, founder of asset management firm Gerber Kawasaki, told Bloomberg, "This is the start of a cycle," expressing optimism that "Arm is a great signal for what’s to come." Matt Maley, strategist at Miller Tabak, said, "(Arm's IPO) could be much more important than people think," adding, "Arm's success will help revive the IPO market, which has been dormant for over a year."