ET Telecom: SoftBank’s Arm files for blockbuster U.S. IPO 2023

Arm Ltd announced on Saturday that its parent company, SoftBank Group Corp, has filed confidentially with U.S. regulators for a stock market listing, paving the way for this year’s largest initial public offering.
After announcing in March that it intended to list Arm on the U.S. stock market, Softbank is proceeding with the blockbuster offering despite adverse market conditions, as evidenced by the IPO registration.

According to Dealogic, U.S. IPOs, excluding listings for special purpose acquisition companies, are down approximately 22% to a total of just $2.35 billion year-to-date. Stock market volatility and economic uncertainty have discouraged many IPO candidates.

Arm intends to sell its shares on the Nasdaq later this year in an effort to raise between $8 billion and $10 billion, according to sources with knowledge of the matter. In a statement confirming a previous Reuters report on the planned IPO, Arm stated that the offering’s size and pricing range have not yet been determined.

The sources cautioned that the precise timing and size of the IPO are contingent on market conditions and requested anonymity due to the sensitivity of the matter.

Arm and SoftBank declined to comment.

There are indications that the IPO market is thawing. Johnson & Johnson Inc is preparing to list its consumer health business Kenvue Inc on the New York Stock Exchange the following week in an effort to raise approximately $3.5 billion.

Since its agreement to sell the chip designer to Nvidia Corp for $40 billion collapsed last year due to objections from U.S. and European antitrust regulators, SoftBank has been pursuing a listing for Arm.

Since then, Arm’s business has outperformed the broader semiconductor industry due to its concentration on data center servers and personal computers, which generate higher royalties. The company reported a 28% increase in sales for its most recent quarter.

Arm’s initial public offering (IPO) is anticipated to improve SoftBank’s fortunes, which have been negatively impacted by the declining valuations of many of its holdings in technology firms.

Arm announced earlier this year that it would pursue a listing on a U.S. exchange in response to a British government campaign to list its shares in London.

Goldman Sachs Group Inc, JPMorgan Chase & Co, Barclays, and Mizuho Financial are leading Arm’s IPO preparations.

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