SoftBank’s Arm IPO Valued at $54.5 Billion

Arm Holdings’s Nasdaq debut in short: SoftBank plans to sell only 9% of Arm’s shares, and will pledge out a 75% stake for margin loans once the stock debuts.

As such, Arm’s tiny float of just 9% is an extreme outlier. Anticipating that the stock will be included in major indices, asset managers are forced to chase after the few shares that are available, with “little price sensitivity,” in the words of a Financial Times report.

During marketing presentations, Arm Holdings’ Chief Executive Officer Rene Haas and his bankers tried to convince investors that Arm would be a big winner in artificial intelligence (AI). Jensen Huang, founder of Nvidia Corp and the largest beneficiary of this year’s Nasdaq rally, showed up in a pitch video seen by Bloomberg Opinion calling Arm an “extraordinary company” with a “world-class management team.”