SoftBank Group Corp. is reportedly testing investor interest in an initial public offering (IPO) of British chip designer Arm Ltd., with a potential fundraising target of up to $10 billion. According to sources who asked not to be named, the IPO may be launched in New York as early as September, making it the largest IPO globally this year. Arm recently filed confidentially for a US listing and appointed Goldman Sachs, JPMorgan Chase, Barclays, and Mizuho Financial as IPO banks. More banks are expected to join the line up.
Deliberations are ongoing, and the final decisions on the size and timing of the IPO will depend on the stock markets' conditions. Arm's valuation has been pitched between $30 billion to $70 billion by bankers, reflecting the challenges of valuing the Cambridge-based firm against volatile semiconductor equity prices. SoftBank's founder, Masayoshi Son, has expressed hope that Arm's IPO could be the largest ever by a chip company.
In the fourth fiscal quarter, Arm's net sales rose by 28% to 92.8 billion yen ($688 million) compared to the same period the previous year. However, it suffered a loss of 6.2 billion yen, compared to a profit of 10.1 billion yen in the previous year's quarter.
The potential IPO of Arm comes amid the global chip shortage, which has led to a surge in demand and prices for semiconductors. The shortage has also highlighted the importance of semiconductors in today's technology-driven world, making Arm's IPO an event to watch closely.
In conclusion, Arm's IPO could be one of the most significant events in the tech industry this year, attracting global investor interest. However, the final decisions on the size and timing of the IPO will depend on market conditions, which remain volatile due to the ongoing pandemic and other economic factors.
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