EconomyFirstFT: Arm shares rise 25% in market debut

FirstFT: Arm shares rise 25% in market debut

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Shares in chip designer Arm closed up 25 per cent at the end of its first day trading on the Nasdaq exchange yesterday, valuing the SoftBank-backed company at more than $65bn.

Arm opened at $56.10 a share yesterday afternoon and closed at $63.59, significantly above the $51 offer price agreed on Wednesday evening, raising almost $5bn for SoftBank.

SoftBank discussed with underwriters on Wednesday whether to price Arm shares above the initial range, at $52, but settled on the lower figure in the belief shares would trade up and boost confidence in overall markets after nearly two years of pressure on valuations.

The strong reception for Arm’s listing will fuel confidence in the wider IPO market, which has been gradually reopening after one of the worst fundraising downturns in decades. Here’s more on the largest US listing in almost two years.

  • Analysis: After its strong public debut, the UK chip designer now has to tackle challenges in expanding its core business and staking out new ones.

  • IPO fees: Arm expects to pay its underwriters as much as $104.6mn in fees, stirring Wall Street bankers’ hopes for a broader revival.

Here’s what else I’m keeping tabs on today:

  • Economic data: The UK has data on insolvencies in England and Wales from last month, and France has its consumer price index. In the US, industrial production figures are released and the University of Michigan publishes its consumer sentiment index.

  • Novartis: Shareholders of the Swiss drugmaker will vote on whether to spin off its generics business Sandoz, with an estimated valuation of up to $25bn. The board has unanimously backed the proposal.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: WhatsApp is exploring a new feature that would display adverts in the app for the first time, but the idea has caused internal controversy over concerns it would alienate users. According to people familiar with the matter, a subscription fee for ad-free use is also being discussed, but many insiders are against the move. Here’s more on parent company Meta’s efforts to monetise the app.

2. Exclusive: The US believes China’s defence minister has been placed under investigation and stripped of his responsibilities, according to people briefed on the intelligence. Li Shangfu has not been seen in public for more than two weeks. Demetri Sevastopulo has more details from Washington.

3. Uranium prices have surged to their highest level in 12 years, jumping about 12 per cent to $65.50 a pound over the past month. Prices for the commodity dubbed “yellowcake” have been lifted by governments seeking to extend the lifetime of nuclear reactors as gas prices rise due to the war in Ukraine. Here’s why analysts expect demand will only increase further.

4. Binance is facing criticism over donations of its in-house cryptocurrency to Moroccan customers after the country’s deadly earthquake. The world’s largest crypto exchange said this week it would give up to $100 of its BNB token to about 70,000 existing customers, in a move worth up to $3mn. Humanitarian relief experts have denounced it as a public relations stunt.

5. Hunter Biden has been charged with lying about his drug use when buying a gun in a three-count indictment filed in a Delaware federal court yesterday, after a deal the US president’s son had initially reached with federal prosecutors fell apart in July. Here are more details about the increasingly politicised legal challenge.

  • Related: Republican House Speaker Kevin McCarthy’s impeachment probe into Joe Biden’s links with his son’s business affairs could backfire, analysts say.

The Big Read

A Ukrainian soldier near Bakhmut this month, against a map of Russian-held territory
© FT montage/AP

Three months into its counteroffensive against Russia, Kyiv is dealing with the reality that it has not achieved the desired decisive breakthrough. While Ukraine’s armed forces have made slow but significant gains in recent weeks, the meagre results have exposed divisions with western officials over strategy and highlighted the need for more arms to sustain a drawn-out war.

We’re also reading . . . 

Chart of the day

The income gap between Londoners and the rest of the UK population has hit a record high, according to official data published yesterday. Households in the capital had £31,094 available per head to spend or save in 2021, 43 per cent above the national average of £21,679, revealing the government’s challenges in implementing its flagship “levelling up” agenda.

Line chart of London’s gross disposable household income per head, UK average=100 showing The gap in disposable income between London and the UK average has widened

Take a break from the news

The week-long London Design Festival takes over the UK’s capital city starting tomorrow. From enormous cork sculptures on the Strand to an exhibition on the style evolution of the grand piano, FT Magazine highlights six of the best things to see, do and roam around.

Three thrones by three makers at Sadie Coles gallery
Three thrones by three makers at Sadie Coles gallery © Katie Morrison

Additional contributions from Miles Ellingham and Benjamin Wilhelm

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