SoftBank-owned chip designer Arm has confirmed it will float on New York’s Nasdaq next month in what will be the largest US initial public offering (IPO) in almost two years.
Arm, which licenses its chip designs to tech giants like Apple, Nvidia, and Qualcomm, has said the offering is being led by Barclays, Goldman Sachs, JPMorgan Chase and Mizuho Financial Group, among 24 others.
The Cambridge-based company left the number of shares it is selling and the pricing of the IPO undisclosed in its highly anticipated regulatory filing with the US Securities and Exchange Commission on Monday.
However, it marks a potential revival of the market for initial listings after an 18-month dry spell.
In a note on Monday UBS Global Wealth Management’s investment chief Mark Haefele said the gloom of rising interest rates globally is beginning to brighten as the US central bank dialled down the speed of its rate hikes.
This move not only replenished funds to its withering Vision Fund, which has struggled from recent investment wobbles, but also potentially established a baseline for the company’s valuation.
Arm itself will not receive any proceeds from the IPO, as it involves SoftBank selling down its stake.
Since Japanese tech firm SoftBank acquired Arm for $32bn in 2016, it has grown to become a key player in the smartphone chip market, with a market share of over 99 per cent.
However, its return to the public market coincides with a slowdown in the smartphone industry, which has seen its largest slump in a decade.
Arm reported $2.7bn (£2.1bn) in revenue for the year ending 31 March, a one per cent decline from the previous year, while net profit also fell by five per cent to $524m (£410m).
“SoftBank’s filing to list Arm in New York will cement disappointment that London has been shunned, even though the decision was announced back in March,” said Susannah Streeter, head of money and markets, at Hargreaves Lansdown.
“The Japanese conglomerate had been holding out for the best market conditions and although they look a little more clement compared to the volatility which hit the tech sector last year, recent summer weakness is clearly pushing the firm to list Arm sooner rather than later,” Streeter said.
She added that the chip designer will use artificial intelligence (AI) as its “calling card to entice investors” as it gears up for the IPO.
“Arm technology is already powering many AI applications and it plans to be instrumental in the next wave of innovation.”
Although Arm’s choice to list in the US is a blow to London, the City could be getting a boost soon as a compliance tech firm which helps financial firms navigate regulation plots a move to the London Stock Exchange, according to reports.