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The pricing range is to be expected in the region of USD 51.- a share.

Arm Holdings Ltd.’s initial public offering is already oversubscribed by 5 times and bankers stopped taking orders, according to people familiar with the matter.

ARM is the biggest initial public offering in nearly two years, the total listing value is expected to be in the region of USD 54.5bn. People familiar with the matter indicated that the IPO is oversubscribed more than 5x, which allows the lead management to fix the issue price in the top price range of around USD 51.- a share, possibly USD 52.- a share.

Arm’s current owner, SoftBank, plans to sell about 10 percent of its stake in the company via a Nasdaq listing. It had originally hoped the deal would value Arm at as much as $70bn. Arm’s race to IPO Despite reporting flat sales in its most recent financial year, Cambridge-based Arm has forecast accelerating revenue growth boosted by the artificial intelligence boom. Demand for its shares has held up in spite of some investors’ concerns about a drop in profits in Arm’s most recent quarter and the company’s exposure to multiple risks in China.

Yet, the present valuation comes below SoftBank’s own assumption of USD 70bn. This occurred on the back of weak processor demand for smartphones during the last year. The present speculation and hype around ARM is supported by the idea that ARM’s chips could be used for AI and data center customers where they play a peripheral role only in the technology required to build the kinds of large language models that power ChatGPT and other generative AI systems.

While we are ultra-positive on the technology and the concept developed by ARM, private investors are advised to restrain running after the issue as we would expect the share price to consolidate lower before going higher afterward – the present market configuration doesn’t look right for this share to start flying on the go.