Arm, the Chip Designer, Raises $4.87 Billion in the Year’s Largest I.P.O.

The News

Arm, the British chip design company whose technology has been essential to nearly all mobile phones, raised $4.87 billion in an initial public offering, it said on Wednesday. Arm’s I.P.O. is the largest this year, and values the company at $54.5 billion.

Chips designed by Arm, led by Rene Haas, its chief executive, have been essential to nearly all mobile phones, including iPhones.Credit…Sam Yeh/Agence France-Presse — Getty Images

Background: SoftBank bet big on Arm’s leading an A.I. revolution.

The debut is an important moment for the Japanese conglomerate SoftBank, which acquired Arm in 2016 and has bet big on the company’s potential to profit from the tech industry’s race to adopt artificial intelligence. The I.P.O. comes 19 months after Nvidia, the Silicon Valley chip maker, abandoned an effort to buy Arm for $40 billion. The Federal Trade Commission had sued to stop that deal.

Why It Matters: Arm’s shares could influence the overall I.P.O. market.

Arm’s return to public markets — it was publicly traded until SoftBank acquired it — is being watched by both Wall Street and Silicon Valley as a barometer of investor appetite for new tech offerings.

Another tech deal — albeit a very different one — is expected next week: Instacart, the grocery delivery start-up, is looking to raise over $600 million, for a valuation of up to $9.3 billion.

What Happens Next: The stock will begin trading on Thursday.

Arm is listing its shares on Nasdaq under the ticker symbol ARM. The company priced its shares at $51 each, but the stock could open for trading at a different price. Usually there’s a period of at least an hour during which buy and sell orders are matched up to set an opening price.

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