European chipmaker Arm goes public and rises 25% while waiting to see who owns it

British software and semiconductor design company Arm, which went public on Wall Street this Thursday, closed up 24.69% to $63.59 a share. It’s the biggest IPO of 2023, involving one of the companies garnering the biggest geostrategic value of the moment amid rising tensions between the US and China over control of semiconductors.

Shares began trading on the Nasdaq in the afternoon under the symbol ARM, their initial public offering (IPO) price was $51, and their shares rose more than 10% within 5 minutes of the release. The highest price the shares reached on the first day on the New York Stock Exchange was $65.50.

The UK-based company makes chip parts for nearly every smartphone in the world, as well as Apple’s computers, Amazon’s data centers and cars. On August 22, Arm filed for listing on the Nasdaq index in New York.

Japanese company Softbank bought Arm in 2016 for about $32 billion, meaning it went private. In 2020, it agreed to sell it to U.S. company Nvidia for about $40 billion, but the deal was scrapped in 2022 after opposition from regulators and its rivals.

In early 2023, it became known that Softbank was considering a listing in the US to reinvest in the acquisition of Arm, given the higher valuation of US investors for stocks in the technology sector. SoftBank will sell 95.5 million shares of the company – about 10% of the equity – and aims to raise more than $4.87 billion, but hopes to keep the remaining shares.

In the coming days, large companies and investors who bought stakes in Arm must notify financial regulators and the owners of the 10% of securities that Softbank intended to divest. According to analysts, the main candidates are Intel, TSMC, Nvidia, Samsung, Apple and Google and other multinational companies.

Arm posted revenue of $2.68 billion in its last fiscal year, which ended in March, and made a profit of $524 million in the period. But beyond its economic potential lies its geostrategic value as the only major European chip farm and rising tensions between the United States and China over the dominance of semiconductors, a key component of digital life.

Source: El Diario





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