SoftBank owned chip designer, Arm is edging closer to attain its initial public offering (IPO) for $54.5 billion at the top of its price range of $47 to $51 per share or even above, according to the report by Reuters, which would be the US biggest debut in two years of NASDAQ.
The strong demand of Arm stock comes from its own customers, the big tech companies like Apple, Google, AMD, Intel and Samsung who signed up as investors, might affect its decision to raise more prices.
Earlier, SoftBank had been trying to sell Arm for $40 billion to Nvidia but abandoned it due to antitrust regulation. However, Arm will not offer more shares as SoftBank originally planned to retain 90% stake in Arm with a $5 billion IPO. And last month, SoftBank acquired a 25% stake in Arm via the $100 billion Vision Fund that it manages.
A big chunk of Arm’s revenue came from royalty fees from each chip that used its design. Last fiscal year, the royalty revenue was at $1.68 billion in which 24.5% of its total $2.68 billion came from China. This concerns investors as the tension between the US and China grows.