IPO Public Markets Semiconductors and 5G

Arm Shares Jump 25% In Nasdaq Debut, Boosting IPO Market Enthusiasm

Shares of Arm Holdings closed up nearly 25% on Thursday, their first day of trading on the Nasdaq, in the most hotly anticipated technology IPO of the year. The British chip designer’s successful debut is likely to breathe new life into a depressed IPO market that has paused many venture-backed startups’ plans to go public for the past two years.

“This pop can get people more excited about the IPO market for the rest of this year and going into 2024,” Owen Lau, senior analyst at Oppenheimer & Co., told Reuters.

Last month, grocery delivery startup Instacart and marketing analytics company Klaviyo also filed their initial public offering plans, in another signal that the IPO drought may finally ease. Peer-to-peer car rental platform Turo, which first filed to go public in early 2022, also submitted an updated registration statement.

Arm raised around $4.87 billion in the offering, which makes it the largest tech IPO since electric vehicle-maker Rivian went public in late 2021. SoftBank still controls about 90% of Arm’s shares following the IPO.

Many of 2021’s IPOs have not gone on to great success as public companies — close to half of the 171 companies that went public in 2021 at billion-dollar-plus valuations and that are still trading are now worth less than $500 million, according to a recent analysis of The Crunchbase Billion-Dollar Exits Board.

The few companies that have ventured onto the public markets this year have also posted a very mixed track record.

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Illustration: Dom Guzman

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