Arm IPO: everything you need to know and how to buy Arm stock

Arm has been a key player in computing since the days of PlayStation One and the Gameboy Colour. Its first Initial Public Offering on the London Stock Exchange in 1998 came five months before the founding of Alphabet, when only 29% of UK households owned a personal computer.

And by 2016, Arm Holdings was ‘the jewel in the crown of British technology.’ But with minimal fuss, the semiconductor designer was bought out by Japan’s SoftBank, in a deal worth £23.4 billion.

When will the Arm IPO take place and what will the share price be?

The Arm IPO will take place on 13 September. They have set the IPO price between $47 and $51.

UK investors can't participate in the IPO (ie. subscribe to the offering), however you will be able to buy or trade shares with us on the day of the listing.

Buy Arm shares: how to trade or invest in the Arm IPO

We'll offer Arm shares to buy right away on 13 September when the IPO takes place. You can:

• Invest and own Arm shares with share dealing from zero commission
• Trade Arm stock either with spread bets and CFDs, please note that the ability to short Arm will depend on the availability of borrow.

All this on the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.

As it's a US IPO, it may take a few hours for the shares to be available to trade (as with all US listings for all brokers) after market open. We'll offer investing in ARM shares from £0 commission if you've traded 3+ times in the previous calendar month. Our standard rate is £10.

If you'd rather trade the stock with derivatives, you can do so commission and tax-free with spread bets, or for $15 commission with CFDs.

Just bear in mind that spread betting and CFD trading is leveraged - this means that you'll only need a fraction of the total trade size to open your position, but your profit and loss will be based on the full position size. This means you could stand to gain or lose money much faster than you'd expect.

Find out more about IPO trading with us, or learn how to take a position before, during and after an IPO

* Best trading platform as awarded at the ADVFN International Financial Awards 2021

Arm IPO: what makes Arm special?

Arm doesn’t manufacture microchips. It designs them. And then it licences out these designs to other companies. For example, the flagship Apple M1 and Samsung Exynos 2200 chips are based on Arm chip architecture.

And it’s hard to overstate just how widespread the company’s designs are. Televisions, smartphones, drones, smart homes, smart cars, wearable tech, and electronic passports all use its technology— almost anyone who uses the internet is exposed to an Arm product every single day.

For context, the company boasts that ‘if the 200 billion Arm-based chips shipped by our partners over the past three decades had been produced at a rate of only one per second, the first would have rolled off (in) 4,300 BCE.’

And amid the ongoing global microchip crisis, Arm’s political, economic, and strategic importance has become more significant than ever.

Arm IPO: a spanner in the works

Nvidia CEO Jensen Huang still expects ‘Arm to be the most important (CPU) architecture of the next decade.’ But while Son wants to launch ‘plan B’ during the next financial year, he faces a hurdle and a choice.

Before Softbank can launch a new IPO for Arm, it will have to resolve an internal dispute with the head of its joint Chinese venture, Allen Wu. While the Arm China board voted to remove him in 2020, he refused to stand down and retains control due to his legal rights. Wu has launched legal action against Arm China, with a view to reappointment to the board.

Arm holds a 47% stake in the joint venture, and it contributes to a fifth of global sales. Worryingly, CFO Inder Singh has confirmed that he is currently unable to audit the venture’s accounts. He makes clear that it’s ‘important for us to make sure that we have certain rights that will be important for our financials (and) one of those will be the continuing right to audit revenues.’

Where will Arm shares list?

There was much discussion around whether Arm would list in the UK or US, but they have opted for a US listing.

SoftBank's Masayoshi Son previously told reporters ‘The NASDAQ stock exchange in the US, which is at the centre of global high tech, would be most suitable for a listing.’ However, the UK government was also keen to court Arm. In 2021, market rules were reformed to attract tech IPOs by allowing dual-class share structures and reducing the number of shares required to be offered to the public to 10%. Extra concessions are not unimaginable.

Janus Henderson’s Richard Clode thinks that US-listed semiconductor stocks such as AMD, Intel and Nvidia have been on a ‘tremendous run.’ Nvidia is now the seventh most valuable company in the US. And Clode argues that ‘growth semiconductors in the US now enjoy valuations well ahead of similar growth semiconductor franchises in Europe or Asia.’

Moreover, a pitiful number of FTSE 100 companies could be classed as tech stocks. And recent London IPOs including Deliveroo, Darktrace and Wise have all fallen far below their IPO valuations.

And Apple alone is worth more than the entire UK index. Other NASDAQ companies like Microsoft, Amazon and Alphabet are all worth over $1 trillion. London-listed tech firms are minnows by comparison. And the NASDAQ hosted 753 IPOs in 2021, raising $181 billion of capital. Rivian alone amassed $12 billion and was the largest US IPO since Alibaba in 2014.