There was high interest in becoming a shareholder when the technology company went public. A Nordea fund took a piece of the Arm pie.
STOCK EXCHANGE: Arm’s share price rose almost 25 percent on the first day of trading on the Nasdaq stock exchange. Photo: BRENDAN MCDERMID / Reuters / NTBPublished: Published:
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The shares in Arm were torn apart when the company, which designs chips for almost all the world’s smartphones, this week went public in New York.
On the first day of trading, the value of the company’s shares rose by a quarter, or 11 billion dollars.
When the company raised money by selling shares before the IPO, interest was so high that many investors failed in their attempts to join the company on the stock exchange.
But a Norwegian mutual fund, Nordea Norge Verdi, succeeded in getting hold of a smaller share of the company’s shares.
– We received a small subscription to subscribe for shares in a company’s capital raising means trying to buy shares in the company, says investment director Robert Næss at Nordea.
The fund was allocated shares worth “a few” million kroner, the manager says.
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– Highly priced
In advance, an army of 28 banks worked to sell the IPO. Brokers gathered more than 100 managers of the world’s largest fund managers in a New York hotel to convince them that this was their chance to make big money from artificial intelligence, according to Financial Times.
They sold 95.5 million shares of Arm at $51 each, a total of shares worth $4.9 billion. The amount corresponds to NOK 53 billion.
The share sale made the IPO the biggest of the year.
There has been excitement surrounding the company’s stock market debut, as it is seen as an acid test for the currently tough IPO market.
Investors’ warm welcome able to entice more companies to go public and put an end to the weak period for IPOs.
– They are priced high, but also make good money, says Næss, who believes that the current pricing is therefore not unheard of.
Arm was priced at $54 billion ahead of the IPO. The amount corresponds to NOK 581 billion at today’s exchange rate.
Arm
British technology company recently listed on the Nasdaq stock exchange in New YorkStarted in 1990 as a collaboration between the technology companies Apple, VLSI Technology and Acorn ComputerDesigner circuits that go into chips, but do not manufacture them, for almost all the world’s smartphonesWill now expand the business to PCs, servers and other devices The Japanese giant Softbank is the largest owner Had revenues of 2.68 billion dollars and a profit of 524 million dollars in the last financial year, which for Arm ended in March Show more
Managing billions
Næss points out that Arm has grown strongly, and believes that the growth will last for quite some time.
He saw the value of Arm rise by almost 25 percent on the first day of trading.
– The issue was around ten times oversubscribed, the oversubscribed investors wanted to buy more shares than the number of shares available for sale in the company’s capital raising and then it is not unusual for the share price to rise on first listing.
Robert Næss, investment director at Nordea Photo: Paul S. Amundsen
Nordea Norge Verdi mainly invests in shares in the Norwegian stock market, but an information document states that the fund can invest some of the funds in companies listed on foreign stock exchanges.
The fund had assets under management of NOK 4.7 billion at the end of the first half of 2023. This means that the investment in Arm is small, compared to the fund’s total capital under management.
Skeptical
In an interview with CNBC on Thursday, Softbank CEO Masayoshi Son emphasized how Arm’s technology is being used in artificial intelligence chips, in an effort to tie the company to the ongoing AI boom.
But not everyone is convinced.
Among them is James Anderson, one of Britain’s best-known technology investors. Anderson has according to Financial Times warned that the British company is not a critical player in important growth markets such as artificial intelligence and cloud services.
The IPO of Arm is a victory for the Nasdaq exchange over the New York Stock Exchange. The competition between the two most important stock exchanges in New York goes back several decades. In the hunt for the biggest IPOs, the stock exchanges promise advertising time and hold lavish IPO parties at their offices, writes Wall Street Journal.
2023-09-16 18:18:16
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