Arm, a subsidiary of SoftBank, anticipates a valuation of more than $52 billion for its IPO.
Arm, a subsidiary of SoftBank Group, is set to make waves in the tech world with its upcoming initial public offering on the New York Stock Exchange. With a valuation of over $52 billion, this IPO is expected to be the biggest tech launch of the year. Arm’s chip designs are the driving force behind more than 99 percent of the world’s smartphones, making it a key player in the industry.
The company recently filed with the Securities and Exchange Commission to become a publicly listed company. Previously listed on the London Stock Exchange and the NASDAQ, Arm was acquired by SoftBank for $32 billion in 2016. The decision to list in New York instead of returning to the LSE was seen as a blow to the UK’s aspirations of becoming a leading tech hub.
The IPO will offer 95.5 million American depository shares (ADS) at a price range of $47–51 per share, aiming to raise up to $4.87 billion. At the lower end of the scale, Arm expects to secure $4.49 billion in new capital. While this valuation is lower than the $64 billion at which SoftBank acquired its stake, it still surpasses the $80 billion deal to sell Arm to Nvidia Corp that fell through last year due to regulatory opposition.
Only 9.4 percent of Arm’s shares will be available for public trading on Wall Street, with SoftBank retaining approximately 90.6 percent of the company’s outstanding shares. Notably, several of Arm’s top customers, including Apple, Nvidia, Alphabet, AMD, Intel, and Samsung Electronics, have invested in the IPO. These key investors have the option to purchase additional shares, potentially reducing SoftBank’s stake to 89.9 percent and raising the IPO amount to $5.2 billion.
Arm’s decision to list in New York was influenced by the city’s established investor base and analysts with a deep understanding of the tech sector. The company has also secured major lenders such as Barclays, Goldman Sachs, JPMorgan Chase, and Mizuho Financial Group as lead underwriters for the IPO. Arm aims to revitalize the IPO market, which has been sluggish since last year, and inspire other tech startups to go public.
Founded in 1990, Arm has become a dominant force in the semiconductor industry, controlling nearly 49 percent of the market for chip designs. Its processors and software platforms are integrated into billions of devices worldwide. While competitors like Intel and AMD are trying to catch up, Arm remains ahead in chip architecture design.
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