SoftBank Set to Launch Arm IPO in US

UTC by Tolu Ajiboye · 3 min read
SoftBank Set to Launch Arm IPO in US
Photo: Depositphotos

Japanese holding behemoth SoftBank has shunned the UK and will now float the IPO of chip manufacturer Arm in the US.

Group founder, chairman and CEO of Japanese multinational conglomerate SoftBank (TYO: 9984), Masayoshi Son, recently announced plans to launch an IPO for Arm in the US. SoftBank, which owns Arm – a leading British chip designer, chose New York City, rejecting its native London. Arm will most likely list on the tech-heavy Nasdaq stock market within the fiscal year ending March 31, 2023. In a press briefing on Tuesday, Son stated:

“The US… that’s the market that we are looking at when it comes to listing Arm, and most likely Nasdaq, but wherever it is, the US is the market that we’re looking at for the listing of Arm.”

The Arm US IPO Came about Following Nvidia’s Failure to Acquire the Semiconductor Firm

SoftBank chose to take Arm public after a proposed acquisition by chip manufacturing giant Nvidia Corp (NASDAQ: NVDA) fell through. Both companies ascribed the reason for the deal collapse to “significant regulatory challenges”. Several antitrust regulators in the US, the UK, China, and Europe probed the deal, which had a value of $40 billion in stock and cash at the time (originally announced in 2020). The deal value eventually surged to more than $60 billion as the bidder’s shares also climbed. Following the unsuccessful sale development, SoftBank decided to switch to “Plan B” to have a “big IPO” and one of the largest ever in the semiconductor industry. At the time, SoftBank believed going the IPO route could be a more lucrative outcome.

Arm is one of 400 companies that SoftBank is betting big on. Although some of these bets seem to be on the right track, others have recently been adversely impacted. Son thinks that there is a reason for that, according to him:

“We are in the middle of a blizzard; The market environment is tough. The long-term interest rate is going up. The monetary policy of the governments is changing around the world. So, the high-growth companies are getting hit with the stock market situation.”

However, the SoftBank CEO also expressed optimism at the tech sector and all its paraphernalia saying that “…the AI revolution is continuously growing. Big time. So we are excited.”

About Arm

Arm came into being as an offshoot of an early computing company called Acorn Computers in 1990. The company’s energy-efficient chip architectures constitute approximately 95% of the world’s smartphones and 95% of Chinese-designed chips. Dual-listed in London and New York until 2016, when SoftBank bought it for $32 billion, Arm has about 6,000 staff globally, and 3,000 in the UK.

Arm is considered an invaluable part of the UK’s tech industry, with the British government hailing SoftBank’s acquisition of the chip manufacturer at the time. However, the government is not so eager to see the semiconductor firm in possession of a foreign company or listed on a foreign stock market.

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