One of this week’s most exciting initial public offerings (IPOs) is taking place today as chipmaker GlobalFoundries makes its market debut on the Nasdaq under the ticker symbol GFS.
The IPO has been priced at $47 per share, which is the higher end of the company’s targeted price range, and is expected to to raise about $2.6 billion for GlobalFoundries.
Earning a valuation of $26 billion, the GlobalFoundries IPO is one of the biggest stock market debuts of the year in the U.S. And the IPO comes at a time when demand for semiconductors and microchips is red hot due to the ongoing global shortage that has negatively impacted sectors ranging from automotive manufacturing to consumer electronics, forcing many companies to scale back production and cut targets.
10 Things to Know About the GFS Stock IPO
Here are 10 things investors should know about the GlobalFoundries IPO that is taking place today:
- Prior to the GFS stock IPO, Abu Dhabi’s sovereign wealth fund, called Mubadala Investment, held a majority stake in GlobalFoundries. However, the sovereign wealth fund sold 22 million shares in today’s IPO, netting it $1.03 billion.
- BlackRock (NYSE:BLK), Fidelity and Qualcomm (NASDAQ:QCOM) have each invested more than $1 billion in the GFS stock IPO, helping to give credibility to the listing.
- GlobalFoundries was created after Abu Dhabi’s sovereign wealth fund bought the chip manufacturing facilities of Advanced Micro Devices (NASDAQ:AMD) in 2009. Then, Mubadala merged what it had purchased with Singapore’s Chartered Semiconductor Manufacturing.
GlobalFoundries specializes in radio-frequency communications chips that enable 5G. Its chips are widely used in motor vehicles and all the leading automotive manufacturers are its customers. Other notable customers include AMD and Broadcom (NASDAQ:AVGO).
- GlobalFoundries is the world’s third-largest semiconductor and microchip foundry by revenue. It comes in behind Taiwan Semiconductor Manufacturing (NYSE:TSM) and Samsung Electronics.
- Currently, GlobalFoundries operates three chip foundries in Singapore with a fourth one slated to come online in 2023. The company has also plans to add a foundry in New York.
- Its IPO prospectus showed that GlobalFoundries has revenue commitments of $19.5 billion.
- GlobalFoundries’ revenue for the first six months of this year came in at $3.04 billion, up nearly 13% year over year. However, the company is still unprofitable. Its net loss in the same period came in at $301 million.
- GlobalFoundries had planned an IPO for late 2022 or early 2023, but moved up the timing to capitalize on the current IPO boom.
- The global IPO market is on track for a record year. Through the end of September, more than 2,000 IPOs raised a combined $421 billion globally, which is an all-time high for public stock listings.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.