Arm files for US share listing

Arm, the UK-based microchip designing company, has filed for a US share listing, with plans to raise up to $10bn (£8bn), potentially making it the largest stock market listing of the year.

Arm, the British microchip designing giant, dealt a blow to the UK by announcing in March that it won’t list its shares in London. The company was acquired by Softbank in 2016 in a deal worth £23.4bn when it was listed in London and New York.

Arm designs processors that power devices such as smartphones and game consoles. Chip manufacturers such as Taiwan Semiconductor Manufacturing Company and popular brands such as Apple and Samsung use Arm’s designs to build their own processors.

Softbank has submitted a draft registration statement to the US Securities and Exchange Commission for the listing of Arm, but no details have been disclosed about the planned fundraising amount or date of the share sale.

Reports suggest that Arm was aiming to raise $8bn to $10bn through its Nasdaq listing this year. Listing a firm on a stock exchange makes it a public company, enabling investors to buy and sell shares of its stock.

Arm, often described as the “crown jewel” of the UK’s tech industry, was founded in Cambridge, England in 1990. Recently, it announced that it would not be pursuing a listing on the London Stock Exchange.

In January, reports emerged that UK Prime Minister Rishi Sunak had resumed talks with Softbank over a potential London listing for Arm. However, Arm ultimately decided not to pursue a London listing, leading to concerns about the UK’s ability to attract tech company stock offerings compared to the higher profiles and valuations offered by US exchanges.

Despite challenging conditions in global financial markets, Softbank is proceeding with the multi-billion dollar sale, according to the registration document, as the number of stock market listings has dropped sharply since the Ukraine conflict and shares in major tech firms have declined due to the pandemic.

Softbank stated that the share listing is dependent on market conditions, other factors, and the SEC’s review process. Last year, Softbank cancelled Arm’s planned $40bn sale to Nvidia due to regulatory hurdles in the UK, US, and EU.

The semiconductor industry has been facing slowing demand following an acute shortage of chips during the pandemic. Last week, Intel, the US chipmaking giant, reported its largest quarterly loss in history, and Samsung, its South Korean rival, posted a more than 90% fall in profits.

Softbank would benefit from a successful stock market listing of Arm, as its Vision Funds have suffered losses due to the declining valuations of many of its investments in technology start-ups.



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By Ryan

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