Arm, a British chip designer, has begun listing its shares on the Nasdaq in New York in one of the largest IPOs in recent years after the London Stock Exchange lost out.
The company, owned by the Japanese investor SoftBank, registered to list its shares on the stock market late Monday night, after months of waiting amid challenging conditions for stock market floats.
The listing will return Arm to stock markets after seven years under SoftBank and its leader, Masayoshi Son, who took the chip designer private in 2016 with a £24 billion transaction. Arm was reportedly valued at $64 billion (£50 billion) in an internal SoftBank transaction this month.
Arm, headquartered in Cambridge, is one of the country’s few big-tech champions. It was founded in 1990 and has played a significant role in the mobile computing revolution, with its designs used for semiconductor chips in a variety of gadgets and other devices.
Its chip designs have been used in over 250 billion devices.
While the company has remained based in the United Kingdom, the New York listing follows a failed attempt by the British government, led by Rishi Sunak, to persuade it and other technology companies to list in London.
The listing is SoftBank’s second attempt to profit from its investment. In 2021, the tech-focused investor agreed to sell Arm to Nvidia for $40 billion. However, that deal fell through a year ago due to opposition from British competition regulators.
The US filing revealed that 30,6 billion Arm-designed chips were manufactured in the year ending in March, up from 29,2 billion the previous year. However, revenues were unchanged at $2.7 billion, and net income fell from $676 million to $524 million.
Arm has not disclosed the number of shares it will offer or the anticipated valuation, but SoftBank will retain control of the company. The listing will not generate any revenue for Arm.
Arm’s Nasdaq Listing: A Strategic Move Amidst Changing Stock Market Landscape
Arm said it expected the chip market to grow by 6.8% a year until 2025, with the increasing complexity of semiconductors required to power smartphones and to train artificial intelligence algorithms allowing the company to contribute more towards the value of each chip.
The filing also revealed that China accounts for one-quarter of Arm’s revenue. Arm said that reliance made it “particularly susceptible to economic and political risks” at a time when the US government is attempting to limit China’s access to the most advanced chip-making technology.
It stated that restrictions imposed by the United States, the United Kingdom, or China could “materially harm” its business.
Rene Haas, the CEO of Arm, has been awarded $20 million in stock and will receive an additional $20 million in cash if the listing is successful.
Barclays, Goldman Sachs, JP Morgan, and Mizuho of Japan will spearhead the initial public offering of Arm’s shares, with 24 additional banks lined up to split the fees for the mega-deal.
Source: The Guardian