SoftBank sets Arm IPO date

Business news | September 1, 2023

By Peter Clarke

MPUs/MCUs Artificial Intelligence

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Processor IP licensor Arm Holdings Ltd. (Cambridge, England) is expected to price its IPO on September 13 and start trading on Nasdaq the following day, according to Bloomberg.

Prior to that Arm will conduct a roadshow to promote the offering, Bloomberg said referencing unnamed sources.

Parent company SoftBank Group Corp. is hoping to raise between US$5 billion and US$7 billion in a listing that values Arm at US$60 billion to US$70 billion, the account said.

This is a considerably better valuation than the US$40 billion that SoftBank stood to gain if it had sold Arm to Nvidia as it agreed in September 2020 (see ARM sale to Nvidia agreed at $40 billion).

Just 10 percent

SoftBank Group does not want to part with more than 10 percent in the listing although reportedly it has asked such companies as Apple, Intel and Nvidia to be anchor investors in Arm to try and set a floor to the IPO valuation and to encourage others to invest.

SoftBank has already set a valuation of US$64 billion on Arm when it bought back 25 percent of the company that it did not own to facilitate the IPO.

Whether it can improve on that valuation will depend on how potential investors view Arm’s prospects on three fronts. The more the roadshow can persuade investors that Arm can be successful in artificial intelligence the better it can do not least because of recent evidence from Nvidia financial results (see AI demand drives Nvidia’s booming Q2 results). At the same time potential investors must consider Arm’s position the technology battle against rival architecture RISC-V – and Arm’s fragile status in China (see Analysis: Arm IPO filing reveals depth of Chinese risk).

If the IPO can get away successfully it could serve to unlock pent up demand for other IPOs that have been delayed because of the downbeat economic atmosphere up to this point in 2023.