Chip designer Arm, owned by SoftBank Group, is targeting a $52 billion IPO in September.
The startup is set to attract major investment from tech giants like Apple, Nvidia, Samsung and Google.
The initial public offering is expected to be the biggest of 2023, and could mark a turning point for the sluggish IPO market.
Chip designer ARM, which is owned by SoftBank Group, could see a valuation of up to $52 billion in its initial public offering on Nasdaq, according to the update. Filing Tuesday.
SoftBank offers 95.5 million American depositary shares, and targets 10% of total shares at a price range of $47-$51 per share.
The company is looking to raise up to $4.87 billion, but even at the low end, it’s set to be the biggest U.S. IPO of the year. According to the report Wall Street JournalPeople close to the deal say they expect high demand during the IPO pre-production period to push the price up.
Not since. Rivian In the year By the end of 2021, another company has reached this size for the first time in the public-market.
The English company, which designs the chips used in most of the world’s smartphones, was previously listed in London and New York by SoftBank in 2016 for $32 billion. The new target estimate is down from $64 billion last month, when SoftBank took a 25% stake in the Saudi Arabian investment arm it manages.
After going public, SoftBank will control about 90% of Arm’s shares, filings show.
Final pricing and initial trading on the Nasdaq exchange is set for next week. It is listed under the symbol “ARM”.
A-list tech titans are in demand
Arm’s list of IPO investors includes a handful of the world’s best-known names in technology, and are set to raise a total of $735 million in stock for the IPO. Samsung, Google, Apple, Nvidia and Intel are among those participating as “cornerstone investors.”
Other top investors include TSMC and Advanced Micro Devices, as well as other chip names MediaTek, Cadence and Synopsys.
A wave of interest in the big name suggests Wall Street and industry leaders have high hopes for ARM in the fast-growing artificial intelligence market it has helped fuel this year. The chip pushed the giant Nvidia to a trillion dollar market value And tech stocks have been buoyed by enthusiasm around the emerging technology.
Lead underwriters for the Arm IPO include Goldman Sachs, Barclays, JPMorgan Chase and Mizuho Financial Group.
Revival of IPOs.
A blockbuster stock launch from 2022 could mark a turning point for the relatively muted IPO market.
The US IPO market is in its deepest slump since 2009, with a historically-low number of companies going public on domestic exchanges since March of last year, according to Bloomberg data.
“On the heels of the slowest IPO market in 20 years, investors are hungry for new ideas and VCs are impatient,” said Rob Watzack, CEO of boutique investment bank Freedom Capital Markets. “We see evidence of this in the number and nature of what we’re receiving, the calls we’re receiving and the type of diligence we’re doing now.”
As for Softbank, the IPO will give it an opportunity to gradually sell off its position in Arm, and any early momentum from the stock launch could provide new capital for specific investments in up-and-coming AI companies. A sign of great interest in this space, The informationAI startups comprise more than 60% of Y Combinator’s latest round of early stage companies, he reports.
In addition, if Arm’s initial success is successful, SoftBank founder Masayoshi Son could make a profit on last year’s $30 billion loss on his Vision Fund.
“We know a good number of companies have been waiting on the sidelines and, all things being equal, we expect Instacart to test the market later this month,” Wotczak said. “Other high-profile companies such as Stripe and DataBricks will be watching closely, and we believe that a successful exit from the IPO door can secure the market for these players.”
Read the main article Business Insider