Arm, the chip designer, raises $4.87 billion in the biggest IPO of the year

The news

Arm, the British chip design company whose technology is crucial to almost all mobile phones, has raised $4.87 billion in an initial public offering, it said on Wednesday. Arm’s IPO is the largest this year, valuing the company at $54.5 billion.

Background: SoftBank has bet heavily on Arm to lead an AI revolution.

The debut is a significant moment for Japanese conglomerate SoftBank, which acquired Arm in 2016 and has bet heavily on the company’s potential to benefit from the tech industry’s race to adopt artificial intelligence. The IPO comes 19 months after Nvidia, the Silicon Valley chipmaker, abandoned its efforts to buy Arm for $40 billion. The Federal Trade Commission had sued to stop that deal.

Why It Matters: Arm’s shares could impact the entire IPO market.

Arm’s return to public markets – the company was publicly traded until it was acquired by SoftBank – is being viewed by both Wall Street and Silicon Valley as a barometer of investor appetite for new technology offerings.

Another tech deal — albeit a very different one — is expected next week: Instacart, the grocery delivery startup, is looking to raise over $600 million, a valuation of up to $9.3 billion .

What happens next: The stock will begin trading on Thursday.

Arm lists its shares on the Nasdaq under the ticker symbol ARM. The company has priced its shares at $51 each, but the stock could be released for trading at a different price. Typically, there is a period of at least an hour during which buy and sell orders are matched to establish an opening price.