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SoftBank’s Chipmaker Arm May See $52B Valuation in Upcoming US IPO

Chip design company Arm may be looking for up to $4.87 billion in funding at the conclusion of its upcoming initial public offering (IPO), which could put the company’s valuation at $52 billion. Arm has submitted an updated F-1 filing to the United States Securities and Exchange Commission (SEC) as it prepares for the IPO.

Arm’s shares will float as American Depositary Shares (ADSs) since it meets the requirement for a foreign private issuer as a British company. The company’s shares will sell at a range between $47 and $51, with Arm listing 9.5 million ADSs in total. According to a CNBC estimate, the lower end of the price range should bring $4.49 billion for Arm and $4.87 billion at the upper end.

Arm will launch trading on the New York Nasdaq. Before SoftBank completed its 2016 acquisition of the company for $32 billion, Arm had a dual listing in New York and London. In 2022, British Prime Minister Rishi Sunak hoped Arm would consider a London listing and met with CEO Rene Haas at the Prime Minister’s residence to discuss options. Although the conversation reportedly ended well, SoftBank concluded on a US-only IPO. The CEO said it was “the best way forward for the company and its stakeholders.”

Following the upcoming IPO, the public will only be able to access 9.4% of Arm’s shares on the Nasdaq stock exchange. The rest will remain in SoftBank’s control. However, the IPO’s underwriters may choose to buy an additional 7 million ADSs for $735 million. If they do this, SoftBank’s Arm stake would reduce to 89.9%.

Arm IPO

Arm Holdings initially filed a Form F-1 with the SEC last month, with Raine Securities LLC as the financial advisor. The IPO would also have JPMorgan, Goldman Sachs, Mizuho Financial Group, and Barclays as joint book-running managers.

CoinSpeaker reported in August that several big tech companies were in talks with Arm to anchor the IPO. Reportedly, Arm has had conversations with Amazon, TSMC, Alphabet Inc, Intel Corp, Apple, and Samsung Electronics Co Ltd. So far, Arm is yet to choose an anchor investor. However, the company has stated that the selected firm would not get any board seats or control.

Before now, Arm had its main focus on tech required for mobile phones. The company was invested in selling blueprints to design microprocessors and licensing instructions for software interactions with produced chips. However, since Rene Haas became Arm’s CEO last year, the company has been putting in effort to diversify and pull in more than the smartphone market. Haas is looking into advanced computing and focusing on chips for data centers involved in artificial intelligence (AI) and cloud computing. According to his LinkedIn page, Haas was appointed Arm’s CEO in February 2022, after spending more than five years as the company’s President Intellectual Property Group.

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SoftBank’s Chipmaker Arm May See $52B Valuation in Upcoming US IPO