Is it time to say “thank you” to the Japanese tech investor for reopening a moribund IPO market? Not so fast. At this level, there’s no guarantee Arm’s stock will sustain upward momentum in the coming months. The starting equity valuation is US$52 billion, based on the share count on admission. Equity analysts unconnected to the share sale are in a different ballpark. Those at AllianceBernstein Holding got to US$47 billion, and the number crunchers at Canaccord Genuity Group reached only US$39 billion. If Arm drifts below its issue price and stays there, the impact on sentiment could be dire.
With almost all Wall Street involved, someone in the room knew how to make Arm Holdings Plc’s initial public offering look like a textbook success.
Owner SoftBank Group Corp ended up pricing the British chip designer’s Nasdaq IPO at US$51 per share. This is neatly at the top of the stated price range and followed 11th-hour reports that the deal could have been struck even higher. The impression is of pent-up demand that could help the share price once Arm starts trading.
