Chip manufacturer Arm, a subsidiary of SoftBank Group Corp, has confidentially submitted its application for a United States stock market debut, setting the groundwork for potentially the largest initial public offering (IPO) of the year.
Despite unfavorable market conditions, SoftBank is undeterred with its plans to list Arm on the U.S. stock exchange, first announced in March.
Arm is Targeting Up To $10 Billion from the IPO
Excluding unique purpose acquisition company listings, U.S. IPOs have experienced a 22% decline, with only $2.35 billion raised so far this year, according to Dealogic.
Potential IPO investors are currently deterred by the stock market’s volatility and economic instability.
Arm is expected to trade on the Nasdaq later this year and aims to generate between $8 billion and $10 billion, anonymous sources reveal. Officially, however, Arm’s statement mentions that the offering’s size and price range have yet to be determined.
The insiders, who requested anonymity due to the confidential nature of the matter, emphasized that the IPO’s final timing and size will depend on market conditions. Both SoftBank and Arm declined to comment on the issue.
Arm’s Business Picks Up The Pace
Signals of an IPO market reviving are becoming evident as Johnson & Johnson gears up to launch its consumer health subsidiary Kenvue on the New York Stock Exchange next week, to generate approximately $3.5 billion.
A $40 billion sale agreement between SoftBank and Nvidia fell through last year due to US and European antitrust regulatory concerns. Since then SoftBank has been eyeing a public listing for Arm.
In the meantime, Arm’s performance has outshined the wider chip sector, thanks to its emphasis on data center servers and personal computers that yield higher royalty fees. The company reported a 28% surge in sales in its latest quarter.
Arm’s IPO is predicted to benefit SoftBank as it struggles to revive its massive Vision Fund, which has been impacted by losses from decreasing valuations of numerous technology startups in its portfolio.
Arm ignored the UK government’s attempt to have its shares listed in London earlier this year, opting for a US stock exchange flotation instead.
Arm is the manufacturer behind processor components found in most mobile devices such as Apple and Samsung products and is reportedly developing a cutting-edge prototype chip. The Financial Times claims that this chip surpasses any semiconductor ever produced. Given Arm’s licensing model, most tech companies rely on its designs.
Goldman Sachs, JPMorgan Chase & Co, Barclays, and Mizuho Financial Group have been picked to lead Arm’s IPO preparations.
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This article was written for Business 2 Community by John Isige.
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