UK Chip Giant Arm Files For Blockbuster US Share Listing
Arm, a British company that specializes in creating microchips, has filed paperwork to offer its stock in the US, potentially paving the way for the biggest IPO of the year.
Apparently, the Cambridge-based company wants to raise up to $10 billion (£8 billion).
The company announced in March that it did not intend to list its shares in London, dealing a blow to the UK.
In a deal of £23.4 billion, Japanese company Softbank acquired Arm in 2016. Arm was listed in New York and London at the time.
To the US Securities and Exchange Commission (SEC), Softbank claimed to have “confidentially submitted a draft registration statement” for the listing.
The amount it intended to raise or the potential timing of the share sale were not disclosed in the announcement.
According to rumors, the company hoped to raise between $8 billion and $10 billion by launching this year on the Nasdaq platform, which is heavily focused on technology.
Arm was established in Cambridge, England, in 1990, and has occasionally been characterized to as the “crown jewel” of the UK’s technological industry.
The company creates the technology for processors, often known as chips, which power everything from smartphones to game consoles.
Chipmakers like the Taiwan Semiconductor Manufacturing Company and businesses like Apple and Samsung use its blueprints to create their own processors.
Listing a firm on a stock exchange takes it from being a private to a public company, with investors able to buy and sell shares of a company’s stock on specific exchanges.
Earlier this year, Arm said it did not plan to pursue a London Stock Exchange listing.
Reports in January said that UK Prime Minister Rishi Sunak had restarted talks with Softbank about a possible London listing.
Arm’s decision raised concerns that the UK market is not doing enough to attract tech company stock offerings, with US exchanges seen to offer higher profiles and valuations.
The registration shows that Softbank is pushing ahead with the multi-billion dollar sale despite difficult conditions in the global financial markets.
The number of stock market listings has fallen sharply since Russia’s invasion of Ukraine. At the same time, shares in major technology companies have fallen in the wake of the pandemic.
Last year, Softbank called off its planned $40bn sale of Arm to technology group Nvidia after facing regulatory hurdles in the UK, US and EU.
After an acute shortage of semiconductors during the pandemic, the chip making industry has faced slowing demand.
Last week, US chipmaking giant Intel reported its largest quarterly loss in the company’s history, while South Korean rival Samsung posted a more than 90% fall in its profits.
A successful stock market listing of Arm would be welcome news for its owner Softbank. Its Vision Funds have been hit by losses due to the declining valuations of many of its investments in technology startups.