ARM, a British semiconductor and software design company, has been at the forefront of innovation for decades, providing the architecture and intellectual property (IP) for a wide range of electronic devices, from smartphones and tablets to IoT devices and supercomputers. In recent years, ARM has been a key player in the semiconductor industry, and its highly anticipated IPO has the potential to reshape the landscape of this rapidly evolving sector.
In 2016, ARM made headlines when it was acquired by the Japanese conglomerate SoftBank Group for a staggering $32 billion. This acquisition raised questions about ARM’s future direction, as SoftBank’s ambitious plans and investment strategies often made headlines in the tech world. Under SoftBank’s ownership, ARM continued to thrive, expanding its reach and influence in the industry.
ARM’s IPO is expected to raise substantial capital. Reports suggest that the company could reach as much as $4.87 billion through this offering, which could potentially value the company at a staggering $52 billion. This is no small feat and underscores the market’s confidence in ARM’s technology and future growth prospects.
In the past, Arm used to be listed on stock exchanges in both London and New York. But in 2016, SoftBank bought Arm for $32 billion. Now, Arm wants to be listed on the New York Stock Exchange (NYSE) again.
Because Arm is a British company, they are considered a foreign company in the United States. So, when they sell parts of their company in the U.S., they do it in a special way called American depositary shares (ADSs). Arm plans to sell about 95.5 million ADSs, and they expect each share to cost between $47 and $51. If they sell their shares at the higher price, Arm could be worth $52 billion in total.
This IPO by Arm is one of the most significant technology IPOs this year. Many investors hope it will make the IPO market more active again, as it has been slow since 2022 because of various economic and political issues.
Arm believes their technology can make a lot of money. They say there’s a huge market worth $202.5 billion in 2022 for their products, and it could grow to $246.6 billion by the end of 2025. This would mean a yearly growth rate of 6.8%.
Arm’s computer chips and software are used in more than 250 billion products worldwide, from small sensors and smartphones to supercomputers. They are a big player in the market for designing computer chips, with almost half, about 48.9%, of the market. Competitors like Intel and AMD are trying to catch up but are having a hard time.
Originally, the British government wanted Arm to be listed on the London Stock Exchange. But Arm’s choice to go to New York instead is seen as a setback for the UK’s plans to become a top tech hub. New York is appealing because it has many big investors and experts in the tech industry.
(Source: Ryan Browne | CNBC | Brian Heater | TechCrunch)
