Arm IPO and what you need to know

Arm Holdings, operating under SoftBank, made an entrance with an initial public offering last Thursday.

• The IPO Wonder: Their shares, initially priced at $51, soared to $63.59 by end of the day - an increase of almost 25%. After the initial release, it reached a high of $69 on Friday, its second day of trading. Since then, share price has gone down to $58.

• SoftBank's Significant Stake: Since taking Arm private in 2016, SoftBank now commands nearly 90% of the outstanding shares.

• Commitment: Despite having a price-to-earnings multiple exceeding 110, which might seem steep when compared to other tech giants, Arm's CFO, Jason Child, told CNBC that their focus isn't purely financial. They are committed to royalty growth and offering cost-efficient, versatile products.

• Legacy Products: Interestingly, Arm's royalty revenues are largely driven by products launched before the dawn of the hashtag era - half of their royalty revenue originates from products introduced between 1990 and 2012.

• Future Projections: Arm isn't resting on past laurels and projects their chip design market to be worth a staggering $250B by 2025. Significant growth is anticipated in chip designs for data centers and automobiles.

• Investors: Arm's influence is far-reaching and has attracted investments from industry leaders such as Apple, Google, Nvidia, Samsung, and AMD.

• A Possible Revival: Despite a recent slump in technology IPOs, Arm's debut could signal a resurgence. They've already made an impressive debut as the largest technology offering of 2023.

On the very first day of trading, Arm's options secured a spot among the 50 most actively traded single-stock names.