Arm Holdings Plans IPO Pricing at $47 to $51 Per Share, Valuation of $50B to $54B

Arm Holdings, the chip designer owned by SoftBank Group Corp, is preparing to launch its initial public offering (IPO) next week and is considering a price range of $47 to $51 per share, according to sources familiar with the matter.

This pricing range, previously unreported, would result in a valuation for Arm ranging from approximately $50 billion to $54 billion, with an expected offering size of $5 billion to $5.4 billion. If successful, this IPO would make Arm the most valuable company to debut on the New York Stock Exchange since electric car manufacturer Rivian Automotive's IPO in 2021.

Sources indicated that SoftBank might consider raising the price range before the IPO based on strong investor demand. However, these sources spoke on condition of anonymity due to the confidential nature of the matter.

Arm declined to comment, and SoftBank had not responded to requests for comment at the time of this report.

The proposed valuation for Arm in its IPO represents a reduction from the $64 billion valuation SoftBank applied when acquiring the remaining 25% stake in the company from its $100 billion Vision Fund just last month. This adjusted valuation reflects a recent decline in demand for some of Arm's product offerings, particularly due to a decrease in global smartphone shipments, which adversely impacted Arm's sales, totaling $2.68 billion for the year ending March 31.

In anticipation of its IPO, Arm has already secured major clients as investors, as reported by Reuters. Notable investors include Apple Inc, Nvidia Corp, Alphabet Inc, Advanced Micro Devices Inc, Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc, and Synopsys Inc. These companies are motivated by a desire to expand their business ties with Arm and prevent competitors from gaining an advantage. Arm's semiconductor designs are considered indispensable by its clients, with over 260 technology companies using them to produce over 30 billion chips annually. These chips power 99% of the world's smartphones and a wide range of devices, from sensors to supercomputers.