Arm showed that the IPO market has legs, but not every technology company is a chip company
British chip designer Arm’s Nasdaq IPO ended up valuing the company at $65.24 billion after its shares closed Up 24.69% at $63.59 yesterday. We actually expected the company to be worth more than you expect given the price range it initially set for its IPO, but yesterday’s performance was above our relatively bullish expectations.
And it came after The company priced the listing at the upper end of the stock’s price range of $47 to $51. Talk about the market’s appetite for chip companies.
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Of course, a strong IPO is great news for Arm, because it shows that investors have confidence in its strategy. Speaking with TechCrunch’s Frederic Lardinois shortly before trading began yesterday, Will Abbey, Arm’s executive vice president and chief commercial officer, said the company “will continue to invest in the three areas of energy efficiency, bottom-line performance and ecosystem.”
But in the current climate, Arm’s IPO is more than just a way for SoftBank to get some cash out of its investment. It’s somewhat of a foreshadowing for times to come, and the optimists among us might say it marks the return of IPO music. However, not everyone believes that IPO pops are a good thing; After all, they also indicate that the price wasn’t right in the first place.
And Instacart certainly took notes from Arm’s Bull Run: Earlier today, the grocery delivery company Increase the suggested price range For public subscription $28 to $30 per sharefrom $26 to $28 per share.
On the one hand, raising the proposed IPO price range makes an IPO less likely. On the other hand, it shows the confidence of the company, its stakeholders and bankers that the stock and the resulting valuation will be well received when the company begins trading.
However, Arm and Instacart are very different companies, and the level of enthusiasm for the future of grocery delivery doesn’t quite equal the hype around AI and semiconductors. Could Instacart be wrong and aiming too high? Let’s find out.
Instacart numbers
Instacart’s IPO is supposed to offer 22 million shares for sale — 14.1 million from Instacart itself and another 7.9 million from existing shareholders. At the high end of the new price range ($30), 22 million shares would bring a total of $660 million and $572 million at the low end.