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Todays ARM share price is $51.32 (as of 22/09/2023 16:00) which is a change of 0.84 or -1.61% from the last closing price of 51.32 with 8,430,168 shares traded giving NASDAQ:ARM a market capitalisation of $52,615,008,567. The most recent daily high has been 52.9 and daily low 50.35. The NASDAQ:ARM share price 52 week high has been 69 and the 52 week low 49.85. Based on the most recent NASDAQ:ARM share price opening of 51.32, the current NASDAQ:ARM EPS (earnings per share) are n/a and the PE (price earnings ratio) is n/a.

🧑‍🎓Follow these three steps if you want to buy shares in the ARM IPO:

This guide will explain how to buy ARM shares on the NASDAQ after their IPO and what to watch out for.

  1. Register for PrimaryBid (this is a central platform that provides access to IPOs, new issues and placing and is backed by the London Stock Exchange.
  2. Open an investment account with a stock broker that offers access to the AIM market where Woodboise is traded, like Hargreaves Lansdown, AJ Bell or Interactive Investor.
  3. You will need to fund your PrimaryBid account before applying for shares in the IPO.
  4. Wait for the ARM application process to start
  5. Enter the amount of money you would like to invest (as ARM shares are not priced yet you need to enter a monetary value, rather than a number of shares).
  6. Choose a stock broker to send the shares to when you are allocated them.
  7. Wait for your allocation (the number of shares you will receive)

🤔Note: ARM Volatility

As a newly listed tech stock, ARM shares are likely to be volatile. If you are buying ARM shares as a long-term investment, this is not quite so relevant as trying to time the market is not as important as time in the market. However, is you are trading ARM shares in the short term, be extra vigilant for excessive price moves.

⚠️What to watch out for! IPO Hype

Many tech stocks are massively overvalued when they come to the stock market for the first time (or in ARM’s case the second time, they used to be listed in London). This is so that private investors can get out at the highest price possible and means that overexcited private investors sometimes overpay for shares initially.

ARM IPO date & value

ARM is due to IPO on the 14th September, the anticipated valuation for Arm has been lowered to $52 billion. This is lower than the earlier projections which gave ARM a potential valuation as high as $70 billion. Arm’s potential market cap also falls below the recent $64 billion price at which SoftBank, the company’s owner, acquired a stake just last month.

What you need to know about the Arm IPO

Chip design powerhouse Arm Holdings is to IPO in New York, in one of the largest listings seen since the pandemic.

Arm’s current owner Japanese technology and venture cap manager SoftBank will spin out the Cambridge-based business after a sale to US chip maker Nvidia (who bid $66 billion for the firm) was finally thwarted by competition authorities last year.

Arm was originally part of pc pioneer Acorn Computer and became a separate business in 1990.

Arm does not make silicon chips itself rather it designs chip sets which are then licensed and manufactured by third parties.

Arm’s designs account for more than 250 billion chips which are present in many devices we use on a day-to-day basis, including around 95% of smartphones.

Softbank will try to IPO Arm with a valuation of $60.0 billion or more, and the roadshow to prospective investors will begin in early September, after the US Labor Day holiday.

It’s unclear exactly what the investor appetite for Arm will be.

How have semiconductor stocks performed this year?

Semiconductor stocks, as measured by the PHLX Semiconductor Index (SOX), have risen by more than +40% year to date.

However, those gains have largely been driven by Nvidia and the hyperbole around artificial intelligence. Away from that niche, the performance has been more pedestrian.

Taiwan Semiconductor, one of the foundries which manufacture chips for Arm’s end customers, is up +22.0% year to date. However, its share price has fallen by -5.44% over the last month.

Who will advise SoftBank on the Arm IPO?

Softbank has lined up Goldman Sachs, Barclays, JP Morgan and Mizuho as advisers on the IPO they will be supported by another 24 banks and brokers.

The question is will investors pay what looks like a rich valuation for Arm, when many believe that the broad chip sector is at the top of the cycle, with additional manufacturing capacity expected to come on stream in the next 5 years?

What about Arm’s earnings and valuation?

SoftBank acquired Arm in 2016 for £24 billion, paying £17.00 per share, a 43% premium to its share price prior to the bid.

SoftBank recently valued the business at $64.0 billion.

According to the IPO prospectus Arm had revenues of $2.70 billion for the 12 months to March 31st, down -1.0% year over year. Whilst net profits for the period fell by -5% to $524 million. Arm expects the chip market to grow by +6.8% per annum until 2025.

What else should I know?

Softbank has held talks with major tech groups such as Amazon, Intel and Nvidia about becoming key shareholders in the business, but it’s unclear what their response to the idea has been.

Arm is significantly reliant on a subsidiary business, Arm China, over which it has no management rights and just a 4.8% equity stake. Relations between the two businesses soured as SoftBank tried to oust the Arm China CEO in a two-year battle.

The IPO of Arm will certainly test the US IPO market which has been in a malaise during 2023.

As to whether Arm shares will be a good investment let’s not forget that GPU and AI giant Nvidia was prepared more than the current valuation to own Arm.

That, and the fact that Arm has a thirty track record as a business should underpin the valuation. However, the cyclicality in the chip sector shouldn’t be ignored.

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