British chipmaker Arm (ARM) debuted on the public markets on Thursday, opening at $56.10 on the Nasdaq in afternoon trading.
Arm’s shares jumped 10% right as trading began and climbed over 20% to above $61 in the first 30 minutes of trading. The stock closed up nearly 25%. Going into the IPO, shares were priced at $51 each.
The company opened trading with a $54.5 billion valuation, but the company’s market cap already has jumped north of $60 billion.
“This is a great first step to reopening what has been sort of an 18-month drought of IPOs in the US tech market,” Blueshirt Group managing director Mark Roberts told Yahoo Finance Live on Thursday.
The chipmaker’s go-public is the most high-profile IPO that the Nasdaq has seen since 2021’s IPO boom, which cycled into a bust in 2022.
Since then, the IPO market has been relatively quiet, picking up slowly with the IPOs of beauty company Oddity (ODD) and Mediterranean restaurant chain Cava (CAVA) over the summer. That trickle has grown into, at minimum, a stream of IPOs, with Arm’s opening and the recent filings of Instacart (CART) and Klaviyo.
“This could be a lot more important than people realize,” Miller Tabak strategist Matt Maley told Yahoo Finance Live ahead of the IPO on Thursday. “If [Arm] does well, that’s certainly going to help open up things for a market that’s been dormant for over a year now. It’s also going to tell us something about this whole thing with AI. There’s still plenty of hype surrounding it but not the big euphoria.”
Arm Holdings CEO Rene Haas, center, rings the Nasdaq Opening Bell at the Nasdaq MarketSite during his company’s IPO, in New York’s Times Square, Thursday, Sept. 14, 2023. (Richard Drew/AP Photo)
However, just because these IPOs are moving doesn’t mean their valuations are not a sticking point. In Arm’s case, the company reportedly sought a valuation of between $60 billion and $70 billion.
Likewise, Instacart — valued at $39 billion at the close of its 2021 funding round — is reportedly now seeking a $9.3 billion valuation.
Arm’s public debut “is a bellwether, but it needs…
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