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British Chip Designer Arm Sees 20% Share Price Surge in Nasdaq Debut

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Arm, the British chip designer whose technology is used in smartphones worldwide, experienced a 20 percent surge in its share price on its first day of trading on the Nasdaq stock exchange in New York. The company had announced earlier in the week that it aimed for a valuation surpassing $52 billion for its initial public offering (IPO).

Shares in Arm opened at a 10 percent increase and continued to rise during early trading, at one point reaching a 20 percent surge before settling at around 17 percent. This initial spike in share price reflects the current enthusiasm surrounding tech companies, particularly with the growing interest in artificial intelligence.

If Arm’s shares maintain their current price at the end of the first trading day, the company’s valuation will be close to $60 billion. As a leading smartphone chip design firm, Arm is owned by Japanese tech investor SoftBank, which has had mixed success with recent investments.

SoftBank plans to raise approximately $5 billion through the IPO, offering around 10 percent of Arm’s shares. The remaining 90 percent will still be owned by SoftBank. CEO Masayoshi Son expressed his desire to retain as much ownership as possible for the long term. He stated, “I’m a long-term believer.”

The success of Arm’s IPO is being closely watched by traders as it could serve as a gauge for other tech IPOs. In recent years, these offerings have been stagnant due to factors such as the Covid-19 pandemic, the conflict in Ukraine, and higher interest rates, which have dampened the appetite for riskier investments.

If Arm’s IPO performs well, it may encourage other companies to consider going public in order to raise funds. This could potentially lead to an increase in deal-making in the coming months.

More detail via Economic Times here… ( Image via Economic Times )

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