British chip designer Arm, which is owned by Japanese group SoftBank (SFTBY), has signed up 28 banks, including Barclays (BARC.L), Goldman Sachs Group (GS), JPMorgan Chase & Co. (JPM) and Mizuho Financial Group (MFG), for its blockbuster initial public offering (IPO) today with its shares set to begin trading on the Nasdaq (^IXIC).
SoftBank (SFTBY) is offering 9.4% of Arm’s stock on the public market but it will still retain 90% after the IPO.
So what does all this mean for investors and how can you buy Arm stock?
Where will Arm stock be listed?
Arm shares are set to begin trading on Thursday 14 September on the Nasdaq (^IXIC) in the US under the symbol “ARM.”
What is the expected price of the Arm IPO?
Shares in the UK chip designer have been priced at $51 before trading begins, giving the company a market valuation of $52.3bn (£42.08bn).
The $51 price is at the top end of a range of $47-$51 a share due to high demand that has resulted in its stock being more than five times oversubscribed, the FT reported on Thursday.
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“The Arm IPO price of $51 is in and all the talk is the float has been priced to pop on its debut later on. The market valuation is still a long way short of the $64bn implied by internal dealmaking at current owner Softbank last month, but if the bankers advising the company called it right then the chip designer could be approaching those levels sooner rather than later,” AJ Bell investment director, Russ Mould, said.
How can you buy Arm stock?
Once the Arm stock has been listed on the Nasdaq, you will be able to purchase shares directly through a trusted and reputable online broker, such as IG Group (IGG.L), CMC Markets (CMCX.L), Hargreaves Lansdown (HL.L), HYCM, AJ Bell (AJB.L), Capital.com and Interactive Investor.
Depending on the chosen trading platform, investors will be able to invest and own Arm shares or trade Arm stock, long or short, with spread bets and CFDs.
However, if buying in the UK, remember that it is a US IPO so it may take a few hours for the shares to be available to trade after Wall Street opens this afternoon at 14:30 GMT.
How much money will the IPO raise for SoftBank?
The IPO is expected to raise about $4.9bn for SoftBank, which paid $32bn to acquire Arm in 2016.
What makes Arm so special?
Arm designs microchips and then licences out its designs to other companies.
Televisions, smartphones, drones, smart homes, smart cars, wearable tech, and electronic passports all use its technology and given the ongoing global microchip crisis, Arm’s strategic importance has become more significant than ever.
Matt Oguz, founding partner at San Francisco-based Venture Science, said Arm's upcoming IPO is particularly intriguing due to its commanding presence in the semiconductor industry and its vital role in enabling technologies from smartphones to cloud computing.
“The company has exhibited robust financial performance, and its strategic advantages are manifold. These include a wide range of applications for its technology, a deep intellectual property moat, and established partnerships with key industry players,” he said.
“Its substantial contributions to the ecosystem of connected devices make Arm an attractive proposition for investors looking to capitalise on the continued growth of IoT, AI, and edge computing,” he added.
Venture Science is participating in the IPO as an institutional Investor.
Watch: Arm IPO is a 'good barometer' for tech and AI, analyst says