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📈Investment Banking

The ARM Re-listing (2023)

September 2023·Beginner

In short

SoftBank listed ARM in September 2023, selling about a tenth of the company and raising roughly $4.9 billion at a $54.5 billion valuation. It was the largest IPO of 2023 and signalled that the listing market had reopened after a long freeze.

The background

SoftBank bought ARM in 2016 for $32 billion. A planned sale to Nvidia fell apart in 2022 after regulators pushed back. SoftBank wanted cash and a public market value for ARM, but IPO markets were shut through 2022 and into early 2023 as interest rates rose and SVB's collapse spooked investors.

The walk-through

1

Why go public now

SoftBank needed liquidity and credibility. ARM was growing on the back of the AI boom, so a strong listing would raise cash and prove the IPO window was open again. Timing a listing is half the battle in capital markets.

2

Setting the price

Lead banks (Barclays, Goldman Sachs, JP Morgan, and Mizuho) ran a roadshow, meeting investors to gauge demand. They priced the shares at $51, the top of the marketed range, and the order book was several times oversubscribed.

3

First day of trading

Shares opened near $56 and closed up about 25%. SoftBank sold around 9.4% of ARM and kept roughly 90%. That first-day pop is typical: banks price slightly low to make sure the trade is a success and there are willing buyers.

4

What the banks actually did

The Equity Capital Markets desk led it. They underwrote (bought and resold) the shares, ran the roadshow, sized the book, and stabilised early trading so the price did not collapse on day one.

5

What happened next

ARM kept climbing on AI chip demand, and the lock-up expired. A clean reopening of the IPO market, which encouraged other companies to list in the months that followed.

Key takeaways

  • ▹Pricing an IPO is demand discovery, not a fixed science. A pop means banks left money on the table on purpose.
  • ▹ECM (Equity Capital Markets) is the IB desk that owns listings end to end.
  • ▹A strong first trade matters: it sets the tone for the whole IPO window.

Why it matters

Investment Banking

ECM runs IPOs from pitch to pricing to stabilisation. This is the bread and butter of capital markets.

Sales & Trading

The first day is trading: the book, the open, and stabilisation are all S&T work.

Private Equity

A public listing is a key exit route for owners. SoftBank's partial exit shows how sponsors monetise via markets.

Key terms

IPO
Initial Public Offering. A company selling shares to the public for the first time.
Roadshow
Meetings between the company and investors to drum up demand before pricing.
Lock-up
A period after listing (often 6 months) during which insiders cannot sell their shares.
Stabilisation
Banks buying shares to support the price in early trading if it falls.
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