UK’s Arm Readies Landmark Nasdaq IPO Amid Industry Buzz
Arm, the prominent UK-based chip manufacturer under the ownership of Japan’s SoftBank since 2016, has initiated steps for a landmark Initial Public Offering (IPO) on the Nasdaq stock exchange. The company’s move to go public comes five months after discreetly filing preliminary IPO paperwork with U.S. regulators.
The anticipated share price remains undisclosed in the F-1 filing. However, SoftBank’s recent purchase of its Vision Fund unit’s remaining 24.99% stake in Arm has drawn attention. This acquisition, valued at over $64 billion, marks a remarkable shift, as SoftBank initially acquired Arm for $32 billion seven years ago. SoftBank’s past valuation practices have garnered scrutiny, including its sizable investment in WeWork.
Arm has a notable history of creating high-performance, energy-efficient central processing units (CPUs) and related technologies. This has positioned the company as a crucial player for semiconductor firms and OEMs globally. Notable clients include Apple, Alphabet, Qualcomm, and Mercedes-Benz.
Industry analysts predict that Arm’s IPO will stand out in 2023. Despite this, debates persist regarding the company’s valuation. Based on initial financial data, Bernstein analysts had earlier pegged the company’s worth at approximately $40 billion.
Arm’s financial disclosure for the fiscal year 2023 mirrors its prior year’s performance, with $524 million net income on $2.68 billion revenue (ending in March). The company’s path involved a failed Nvidia merger due to regulations, prompting the current IPO direction.
Established in 1990 through collaboration between Acorn Computers, Apple, and VLSI Technology, Arm was previously listed on the London Stock Exchange and the Nasdaq until SoftBank’s privatization move.
Arm’s pursuit of IPO includes a comprehensive list of potential risks in its F-1 filing. A notable concern is that customers might opt to license its architecture and create their processors, bypassing Arm’s products.
Arm is delving into advanced semiconductor development to counter this risk, as per an April Financial Times report. The imminent IPO highlights Arm’s journey from a joint venture to a major global chip industry player.