Arm’s changing business model is wildcard for IPO
SoftBank Group is floating Arm in an IPO, but the chip designer's new business model and potential valuation of over $60 billion lack proof points, making it a risky gamble for investors.
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Posted 8/24/2023, 11:39:00 AM
reuters.com
Relevant topic timeline:
SoftBank shares rise after its chip unit Arm files for a Nasdaq listing, South Korea's consumer sentiment weakens for the first time in six months, Hong Kong's inflation rate slows more than expected, UBS identifies stocks that could drag the Stoxx Europe 600 down 10%, and the 10-year Treasury yield hits its highest level since 2007.
Arm, the chip designer owned by Softbank, has filed for an IPO on the Nasdaq, with the valuation yet to be specified, while tech stocks remain resilient despite surging bond yields, and Microsoft restructures its mega-merger with Activision Blizzard to secure approval from UK regulators.
Arm Holdings, backed by SoftBank Group, plans to choose a US IPO as it faces a 1% decline in annual revenue, indicating a slowing smartphone market, and its stock market launch is expected to revive a lacklustre IPO market.
Chip designer Arm signed up 28 banks for its upcoming IPO without disclosing a fee arrangement, demonstrating owner SoftBank's leverage over underwriters eager to participate.
Semiconductor chip company Arm has filed for an IPO on the Nasdaq, seeking a valuation of up to $70 billion, but faces risks and potential headwinds due to financial challenges and geopolitical tensions with China.
Arm Holdings, the designer of central processing units (CPUs), has filed an F-1 with the SEC in its first step towards an initial public offering (IPO), seeking a valuation of $60 billion to $70 billion despite a decline in revenue and net income in the past year.
SoftBank's desired valuation for Arm's IPO may be too high, as investors are focused on medium-term operating profit rather than just revenue, and Arm would need to achieve implausible levels of growth and profitability to justify the target valuation.
SoftBank Group's chip designer Arm is seeking a valuation of more than $52 billion in its initial public offering, targeting the largest U.S. stock market flotation of the year.
SoftBank has invested over $1 billion in Stack AV, a new autonomous trucking firm founded by the creators of defunct self-driving startup Argo AI, with hopes of revolutionizing the trucking and freight industries despite technological and regulatory challenges.
Arm, a chip-design company, is gearing up for a major IPO and analysts at Susquehanna believe it deserves a premium valuation similar to that of Nvidia.
Arm Holdings, owned by Softbank, has received investor demand that is six times the amount it is seeking in its $5 billion stock market debut, making it more likely to reach its targeted price range of $47 to $51 per share.
SoftBank Group CEO Masayoshi Son accepted the recommendation of his bankers to leave an extra $1 per share on the table for chip designer Arm Holdings' oversubscribed IPO, projecting a bigger pop when the stock debuts on Nasdaq, valuing Arm at $54.5 billion.
SoftBank CFO Yoshimitsu Goto declared that Arm, the U.K. chip designer, is SoftBank's most crucial subsidiary and vital to its artificial intelligence strategy.
SoftBank's initial public offering of Arm Holdings was a success, with the shares gaining 25% on their debut, although the company left potential profits on the table by pricing the IPO lower than it could have been.
SoftBank is reportedly seeking AI deals, including a potential investment in OpenAI, after the successful IPO of its Arm unit, with the company's founder and CEO, Masayoshi Son, planning to invest billions of dollars in AI technology.