Arm Holdings Ltd. is considering raising the price range of its initial public offering (IPO) after meetings with investors for what would be the world’s largest listing this year, according to people familiar with the matter.
Sources, who requested anonymity as the information is private, said that the sale of shares of the chip designer, owned by SoftBank Group Corp. (USOTC:SFTBY), is approximately six times oversubscribed. Deliberations are ongoing, and no final decision has been made.
Arm (NASDAQ:ARM) initially sought its IPO at a price of $47 to $51 per share, which would have valued the company at $54.5 billion at the upper end of the range. This valuation fell short of the $60 billion to $70 billion target the company had aimed for earlier this year.
It is common for companies going public and their investment bankers to seek to create positive momentum as they approach the final pricing of an IPO, scheduled for Wednesday. Trading is set to commence the following day.
Reuters previously reported that Arm is discussing the possibility of raising the price range and could set the offer price at the top of the range or even above it. A representative of Arm declined to comment.
SoftBank’s shares have risen by as much as 2.6% and have gained about 15% so far this year.
Arm has been looking to raise up to $4.87 billion by offering 95.5 million American depositary shares in the range of $47 to $51. Any price increase is a sign of strong demand for its shares during the roadshow.
During its investor roadshow, Arm stated that it expects revenue growth of 11% in its current fiscal year and a mid-20% range increase in fiscal year 2025, driven by demand for chips to power data centers and artificial intelligence, as previously reported by Bloomberg.
During a lunch with investors in New York, Arm CEO Rene Haas reportedly stated that the price increases had provided the company with “greater uplift than historically seen,” according to attendees. Investors said Haas expects robust growth to continue in fiscal year 2026, with tenfold percentage increases in revenue.
The chip giant’s return to the stock market promises to shake up the market and be the biggest listing of the year.
What you need to know about ARM’s IPO
- According to information from Reuters, SoftBank plans to sell around 10% of ARM’s shares in the IPO and seeks a valuation of between US$60 billion and US$70 billion for the company.
- ARM planned to raise between $8 billion and $10 billion from the IPO, a number that is expected to decrease after SoftBank buys a 25% stake in the company.
- SoftBank is in talks with several technology companies that are considering investing in the IPO, including Amazon and Nvidia.
- The exchange listing is expected to provide a boost to the entire technology market.
- ARM expects to list on the Nasdaq and trade under the symbol ‘ARM’.