The Arm IPO is one of the most anticipated public offerings of 2023. So, it is natural that there is excitement across the pond too. But if recent reports are to be believed, the Britishers might be eyeing a slice of the pie. And if things go to plan, the public offering by Arm could also debut at the London Stock exchange (LSE).
However, it is unlikely that the Arm listing will take place by March. Cambridge-based Arm, which is owned by SoftBank, might not list in this quarter as tech stocks are yet to recover from the global selloff. Furthermore, current tech valuations do not offer a very promising future for upcoming IPOs. It is likely that the Japanese conglomerate will slightly delay its listing until the economic climate changes.
The company has a strong leadership in chip technology and has invested heavily in emerging technologies like autonomous vehicles, IoT, and augmented reality headsets to maintain its dominance.
Understanding its capabilities and future prospects, the UK has now embarked on a mission to convince the company to give the LSE a chance at the Arm IPO.
The Arm IPO Delay
The Arm Holdings IPO seems like a reliable business opportunity amidst the economic downturn that has spread its tentacles across the market.
Experts estimate the Arm valuation is expected to be around $40 billion as the chipmaker caters to over 500 high profile clients including Apple, Samsung, and Google. The chipmaker was bought by SoftBank for $32 million in 2016.
In 2022, Nvidia’s bid to buy Arm fell through amidst regulatory scrutiny and anti-competitive concerns. The Japanese Bank has been keen on pursuing the Arm IPO as it struggles to offset losses acquired from other businesses. It also wants to be able to provide employees with stock options as incentives.
The public offering of Arm was initially slated to go on floors in 2022. But the sharp decline in prices and the market nosedive prompted the company to push back its debut.
Late last year, Arm informed its private shareholders that the company will not go ahead with its public offering until we are well into 2023, squashing hopes of a listing in this quarter ending March 31, 2023.
“Clearly, we want to IPO as soon as is possible. But given the current global economic uncertainty, given the state of financial markets, that’s probably now unlikely to happen before the end of March 2023,” Ian Thornton, Arm’s head of investor relations, told investors.
“However, preparations for the IPO are going very well. They’re advanced. And we are fully committed to an IPO sometime in 2023,” he added, to assuage worried stakeholders.
Big tech companies like Google, Amazon, and Meta have seen their shares slump as inflation and geopolitical tensions spill over into the equity market. According to research from EY, proceeds from IPOs dropped by 57% in 2022, in comparison to the previous year.
The UK makes a move on Arm
The $40 billion-dollar listing of Arm has attracted the attention of all and sundry, including officials at the LSE. The Sunday Times reported that officials are doing their very best to convince the SoftBank-owned firm to consider a listing on the London Stock Exchange, along with its listing on New York’s Nasdaq.
The delay in listing has also worried industry leaders, including politicians, who have been trying to paint London as a great destination for tech IPOs. In recent times, London has been trying to come out of the shadow cast by its rival, New York.
The UK government is believed to have engaged in some high-profile discussions in January to turn this dream into reality. The Financial Times reported that the British Prime Minister Rishi Sunak hosted Arm chief executive Rene Haas at Downing Street to discuss the matter that was remotely attended by Masayoshi Son, CEO of Arm’s parent company SoftBank.
The government and regulators have also made changes to laws governing public offerings in a bid to woo tech companies to give the LSE a fighting chance. Arm was a FTSE 100 company with listings in both London and New York, before SoftBank’s purchase in 2016.
Only time will tell whether the Arm IPO will have a dual listing on Nasdaq and the London Stock Exchange. While a dual listing is a great investment opportunity, it also means double the costs and complexity.
