Chip designer Arm Holdings Plc fell below its initial public offering (IPO) price just a week after going public. This highly anticipated IPO transaction was previously seen as a signal that the market is ready to welcome new stock listings with open arms. Arm's ADS price fell to $49.85 during the session, falling below the issue price of $51, and then narrowed the decline to close at $52.16.
The SoftBank Group Corp.'s IPO was the largest IPO this year. It soared 25% on its first day of trading last week. However, the enthusiasm did not last long, and the stock wiped out most of the gains in five trading days.
Arm's valuation has previously raised questions from some analysts, with Redburn saying earlier this week that the company faces high risks and a challenging road ahead. Bernstein's view was sharper, first giving an underperform rating and saying that the stock may not be a beneficiary of the artificial intelligence wave as some investors expect.