SoftBank CEO Masayoshi Son in the background of SoftBank Group and Arm Division in 2016.
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Chip designer Arm said Tuesday it is seeking up to $4.87 billion in a blockbuster initial public offering scheduled on the Nasdaq Stock Exchange in New York, according to a new filing.
The deal could value the company up to $52 billion.
Arm is Updated F-1 filing We have expressed our ambition to cooperate with the US Securities and Exchange Commission and become a publicly traded company again. It was previously dual-listed in London and New York. Softbank Acquired for $32 billion in 2016.
Arm, a British company, qualifies as a foreign private issuer in the United States and its shares count as American Depositary Shares (ADS). The company plans to offer 95.5 million ADSs at prices ranging from $47 to $51. CNBC estimates that at the high end of that range, Arm is likely to raise up to $4.87 billion. On the low end, an IPO would see Arm get $4.49 billion in new capital.
When the company surfaced in New York, it will aim to tap into the rich institutional money pool. Arm is looking to ramp up its investment in research and development, especially as it pursues growth in artificial intelligence with some new chips. The company recently released a new chip specifically targeting his AI and machine learning use cases.
At the high end of the price range, Arm’s valuation would reach $52 billion, according to CNBC’s calculations. On the lower end, its valuation would be below $50 billion.
Only 9.4% of Arm shares are freely traded on New York’s Nasdaq stock exchange, and after the IPO, SoftBank is expected to own about 90.6% of the company’s outstanding shares.
Publicly traded underwriters have the option to purchase up to 7 million additional American Depositary Shares, valued at $735 million. If it chooses to purchase these shares, SoftBank’s ownership in Arm will drop to 89.9%, the company said.
Biggest tech IPO of the year
Arm’s listing is set to be the biggest tech IPO of the year. Investors hope the listing will breathe new life into the IPO market, which has been largely frozen since 2022.
The beginning of macroeconomic and geopolitical challenges — The central bank’s rate hikes following Russia’s invasion of Ukraine led to a sharp drop in tech valuations last year, which sparked a backlash against the tech company’s decision to go public.
Arm believes its technology has significant revenue opportunities, with the IPO filing citing a total addressable market (TAM) of $202.5 billion in 2022. The company expects this to rise to $246.6 billion by the end of the calendar year ending December 2022. 31, 2025 — Represents a compound annual growth rate of 6.8%.
Arm says its energy-efficient processor designs and software platform are embedded in more than 250 billion chips worldwide, from sensors and smartphones to supercomputers.
The company estimates it has about a 48.9% share of the semiconductor design market.other players, such as intel and AMDcompanies have raced to keep up with the design of their own chip architectures, but have struggled so far.
The British government initially hoped Arm would be listed on the London Stock Exchange, but Arm’s choice of New York has dealt a heavy blow to Britain’s ambitions to become the world’s leading technology hub.
The U.S. financial center has a rich institutional investor base and analysts who understand the technology sector well.
Correction: This article has been corrected to reflect the fact that Arm is listed on the Nasdaq Stock Exchange in New York. An earlier version of this article incorrectly listed the name of the exchange.