UK chip giant Arm files for popular US stock listing

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By Mariko OiBusiness, May 1, 2023, 04:00 GMT

Updated 15 minutes ago

Image source, Getty Images

British microchip design company Arm has placed orders to sell its US shares, paving the way for what could be the year’s biggest stock market listing.

The Cambridge-based company is said to aim to raise up to $10bn (£8bn).

In a blow to the UK, the company said in March that it had no plans to list its shares in London.

Arm was bought in 2016 by Japan’s Softbank Group in a deal worth £23.4 billion. At that time, Arm was listed in London and New York.

The company designs the technology behind the processors — known as chips — that power devices from smartphones to game consoles.

His designs are used by chip manufacturers such as the Taiwan Semiconductor Manufacturing Company and household brands such as Apple and Samsung to build their own processors.

SoftBank said it had “confidentially filed a draft registration statement” for the listing with the US Securities and Exchange Commission (SEC).

The announcement did not disclose how much it plans to raise or when the shares will be sold.

The company was seeking to raise between $8 billion and $10 billion by listing this year on the tech-heavy Nasdaq in New York, according to reports.

Listing a company on the stock exchange takes it from being a private company to a public company, as investors can buy and sell the company’s shares on specific stock exchanges.

Sometimes referred to as the “crown jewel” of the UK’s tech sector, Arm was founded in Cambridge, England, in 1990.

Earlier this year, Arm said it had no plans to pursue a listing on the London Stock Exchange.

It was reported in January that British Prime Minister Rishi Sunak had resumed talks with Softbank over a possible London listing.

Arm’s decision has raised concerns that the UK market is not doing enough to attract bids for tech stocks, with US stock exchanges seen as offering higher profiles and valuations.

The filing shows that SoftBank is moving forward with the multi-billion dollar sale despite difficult conditions in the global financial markets.

The number of listings on the exchange has fallen sharply since the Russian invasion of Ukraine. At the same time, stocks of major technology companies have plunged in the wake of the pandemic.

SoftBank said the listing was “subject to market conditions, other conditions, and completion of the SEC’s review process.”

After an acute shortage of semiconductors during the epidemic, the chip manufacturing industry has faced a slowdown in demand.

Arm’s successful stock market listing would be welcome news for its owner, Softbank. Vision Funds suffered losses due to the lower valuations of many of its investments in technology startups.

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