Arm has submitted a listing application to Nasdaq

Recently, Arm, the British chip design subsidiary under SoftBank, has tendered its listing application to the NASDAQ Stock Market in the United States, aspiring to trade under the ticker symbol “ARM”. While the firm’s IPO valuation, pricing, and fundraising scale remain in deliberation, the pricing is anticipated to be finalized next week. Arm envisages initiating its roadshow in the inaugural week of September, with IPO pricing set to follow the succeeding week. Media speculations prognosticate Arm’s valuation to oscillate between 60 and 70 billion dollars, positioning it potentially as the year’s most substantial IPO.

Beyond its paramount role in the consumer electronics realm, Arm’s lofty IPO valuation is intimately tethered to the prevailing fervor surrounding Artificial Intelligence. As delineated in their application, Arm’s technology is quintessential for AI applications. While their focal pursuit remains the development of Central Processing Units (CPU), they refrain from fabricating the Graphic Processing Units (GPU) requisite for constructing large-scale AI models. Arm elucidates, “The CPU is pivotal in all AI systems, whether it’s executing AI workloads or collaborating with co-processors like GPUs or NPUs.”

However, amidst the global semiconductor demand’s languor, Arm is grappling with adverse ramifications stemming from a deceleration in demand for products like smartphones. Such factors inevitably impinge upon the company’s revenue and its IPO valuation. Arm’s listing documents reveal a net profit of $524 million and revenue of $2.68 billion for the fiscal year ending in March 2023, marginally trailing their 2022 sales figure of $2.7 billion. Concurrently, SoftBank’s financial statement discloses a 4.6% year-on-year contraction in Arm’s net sales for the second quarter, plummeting into a deficit.

SoftBank acquired Arm in 2016 for a sum of $32 billion and endeavored to vend it to NVIDIA for approximately $40 billion in 2020. However, amidst opposition from regulatory bodies and Arm’s clientele, NVIDIA eventually renounced the acquisition last year. Subsequent to this, SoftBank catalyzed Arm’s IPO preparations.