Arm, a British company that specializes in creating microchips, has filed paperwork to sell its stock in the US, potentially paving the way for the biggest IPO of the year.
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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.
The company creates the technology for processors, often known as chips, which power everything from smartphones to game consoles. The Taiwan Semiconductor Manufacturing Company and well-known companies like Apple and Samsung use their blueprints to create their own processors.
To the US Securities and Exchange Commission (SEC), Softbank claimed to have “confidentially submitted a draught 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 sources, the company hoped to raise between $8 billion and $10 billion by launching this year on the New York stock exchange’s Nasdaq platform, which is heavily focused on technology.
A corporation becomes public when it is listed on a stock exchange, enabling investors to buy and sell shares of its stock on designated exchanges. Arm was established in Cambridge, England, in 1990, and has occasionally been characterized as the “crown jewel” of the UK’s technological industry.
Arm declared earlier this year that it had no plans to pursue a listing on the London Stock Exchange.
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According to reports from January, UK Prime Minister Rishi Sunak had picked up discussions with Softbank over a potential London listing.
Because US exchanges are perceived to offer higher profiles and valuations, Arm’s decision raised concerns that the UK market is not doing enough to attract stock offerings from tech companies. The registration demonstrates that Softbank is continuing with the substantial sale despite challenging circumstances on the international financial markets.
Since Russia’s invasion of Ukraine, there has been a dramatic decrease in the number of stock market listings. In the wake of the epidemic, shares in significant technology businesses have slumped.
According to Softbank, the listing is “subject to market and other conditions and the completion of the SEC’s review process.”
After encountering regulatory obstacles in the UK, US, and EU, Softbank decided to abandon its $40 billion sale of Arm to technology company Nvidia.
After a severe semiconductor shortage during the pandemic, the demand for chips has slowed.
While South Korean rival Samsung posted a more than 90% drop in its profits last week, US chipmaking giant Intel reported its largest quarterly loss in company history.
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For its owner Softbank, a successful listing of Arm on the stock market would be good news. Due to the decreasing valuations of many of its investments in technology start-ups, its Vision Funds have suffered losses.