Arm Holdings Files for Year’s Largest US IPO, Setting Valuation at $60-70B

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Arm Holdings, the semiconductor unit of SoftBank Group, has filed for a highly anticipated initial public offering (IPO) in the US. This IPO is set to be the largest one in the country this year, with Arm looking to achieve a valuation of $60 billion to $70 billion. The news of Arm’s IPO filing has given a significant boost to the struggling equities markets, marking their biggest lift in almost two years.

In the filing submitted to the US Securities and Exchange Commission, Arm did not disclose the proposed terms for the share sale. However, according to Bloomberg News, the company plans to commence its roadshow in the first week of September and price the IPO the following week. The IPO was initially expected to raise between $8 billion and $10 billion, but this target may be adjusted as SoftBank has decided to maintain a larger stake in Arm after acquiring Vision Fund’s holdings.

The IPO is being led by prominent financial institutions such as Barclays, Goldman Sachs Group, JPMorgan Chase, and Mizuho Financial Group. Additionally, 24 other underwriters are listed below the top-tier firms. If successful, this listing will be the largest in the US since Rivian Automotive’s $13.7 billion offering in October 2021, and it could even rival the tech industry’s record-breaking IPOs by Alibaba Group and Meta Platforms (formerly known as Facebook).

The potential success of Arm’s IPO would not only provide relief for SoftBank founder Masayoshi Son, who faced a record loss of $30 billion last year, but it could also encourage other start-ups to proceed with their own IPO plans. Companies like Instacart and Klaviyo may be inspired to follow suit, albeit with possible delays.

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The target valuation of $60 billion to $70 billion for Arm highlights the increasing market demand for technologies associated with artificial intelligence chips and generative AI. Although Arm’s technology is already widely used in smartphones, its presence in the industry has been relatively unacknowledged. The company sells blueprints necessary for designing microprocessors and licenses instruction sets that govern software program interactions with these chips. Arm’s technology’s power efficiency has been vital for its ubiquity in phones, where battery life is crucial.

Under the leadership of CEO Rene Haas, who assumed the position last year, Arm is exploring opportunities beyond the smartphone market, which has experienced stagnation in recent years. Haas aims to expand into more advanced computing, particularly data center chips for cloud computing and artificial intelligence applications. Processors for this market segment are among the most lucrative in the industry, but also come with significant costs.

Amazon, for example, has embraced Arm-based chips for its Amazon Web Services due to their superior energy efficiency and economic advantages. These chips are used by approximately 40,000 AWS customers. In the IPO filing, it was confirmed that SoftBank will retain controlling ownership of Arm once it goes public. The Vision Fund’s 25% stake in Arm was acquired by SoftBank for $16.1 billion, as stated in the filing.

Arm’s revenue experienced a slight decline of approximately 1% in its last fiscal year, according to the filing. Sales for the year ending on March 31 amounted to $2.68 billion. It should be noted that the figures mentioned are still subject to change.

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Arm plans to list its shares on the Nasdaq Global Select Market under the symbol ARM. As the IPO progresses, market watchers will be closely tracking Arm’s performance and the implications it may have for the broader technology industry and investor sentiments.

In conclusion, Arm Holdings’ filing for the year’s largest US IPO, with a targeted valuation of $60 billion to $70 billion, has injected much-needed optimism into struggling equities markets. This IPO holds the promise of being a significant success and could potentially influence the IPO plans of numerous technology start-ups. Arm’s move into advanced computing and its partnerships with market giants like Amazon position it favorably for future growth. As the IPO journey unfolds, investors and industry observers will be eagerly awaiting the outcome and its potential impact on the technology sector at large.

Frequently Asked Questions (FAQs) Related to the Above News

What is Arm Holdings?

Arm Holdings is the semiconductor unit of SoftBank Group, specializing in designing microprocessors and licensing instruction sets for software program interactions with these chips.

What is the significance of Arm's IPO filing?

Arm's IPO filing is highly anticipated and set to be the largest IPO in the US this year. It aims to achieve a valuation of $60 billion to $70 billion, providing a boost to struggling equities markets.

When is Arm planning to commence its roadshow?

According to Bloomberg News, Arm plans to commence its roadshow in the first week of September and price the IPO the following week.

Which financial institutions are leading Arm's IPO?

Arm's IPO is being led by prominent financial institutions such as Barclays, Goldman Sachs Group, JPMorgan Chase, and Mizuho Financial Group, with 24 other underwriters listed below them.

How does Arm's IPO target compare to other recent IPOs?

If successful, Arm's IPO will be the largest in the US since Rivian Automotive's $13.7 billion offering in October 2021. It could even rival the record-breaking IPOs by Alibaba Group and Meta Platforms (formerly known as Facebook) in the tech industry.

What are the potential benefits of Arm's IPO for SoftBank and other start-ups?

Arm's IPO success would provide relief for SoftBank founder Masayoshi Son and could encourage other start-ups like Instacart and Klaviyo to pursue their own IPO plans.

What market demand does Arm's IPO highlight?

The IPO highlights the increasing market demand for technologies associated with artificial intelligence chips and generative AI, as Arm's technology plays a crucial role in powering smartphones.

How is Arm expanding beyond the smartphone market?

Under CEO Rene Haas, Arm is exploring opportunities in more advanced computing, particularly data center chips for cloud computing and artificial intelligence applications.

Who are some notable customers using Arm-based chips?

Amazon is one prominent customer that embraces Arm-based chips for its Amazon Web Services due to their superior energy efficiency and economic advantages.

What is SoftBank's ownership stake in Arm?

SoftBank will retain controlling ownership of Arm even after it goes public. It acquired the Vision Fund's 25% stake in Arm for $16.1 billion.

What has been Arm's revenue performance?

According to the filing, Arm's revenue experienced a slight decline of approximately 1% in its last fiscal year, with sales of $2.68 billion for the year ending on March 31.

Where does Arm plan to list its shares?

Arm plans to list its shares on the Nasdaq Global Select Market under the symbol ARM.

What are the implications of Arm's IPO for the broader technology industry?

Arm's IPO will be closely watched by market observers, who will be interested in its performance and its potential impact on the technology sector as a whole.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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