Submission of Nasdaq Listing Registration Statement
British ARM, a subsidiary of Japan's SoftBank, which is planning to list on the US stock market this September, has formalized its Nasdaq listing process by submitting registration documents to the US securities authorities.
On the 21st (local time), ARM submitted a securities registration statement (S-1) for its initial public offering (IPO) to the US Securities and Exchange Commission (SEC), according to major foreign media including Bloomberg. According to the documents ARM submitted to the SEC that day, ARM aims to raise $8 billion to $10 billion (approximately 10.73 trillion to 13.41 trillion KRW). If this IPO succeeds, ARM's corporate value is expected to reach up to $70 billion (about 94 trillion KRW). The size of the new share issuance and the offering price have not yet been decided.
If the IPO, expected in September this year, is successfully completed, it is anticipated to be the largest US stock market IPO of the year. Bloomberg reported that in terms of listing size, it will be the third-largest technology company IPO in US stock market history, following Alibaba's $25 billion IPO in 2014 and Meta's $16 billion IPO in 2012. Bloomberg also predicted that "this listing will be similar to or slightly smaller than the $13.7 billion offering size of electric vehicle manufacturer Rivian, which went public in October 2021."
The ARM listing process is being led by SoftBank Chairman Masayoshi Son. It is reported that Chairman Son is personally involved in attracting Nvidia as an anchor investor to leverage artificial intelligence (AI), the hottest theme on the New York Stock Exchange this year, as a key factor for ARM's listing success.
For a successful IPO, it is important to dispel concerns about worsening business conditions such as excess smartphone inventory. The AI boom, the hottest theme on the New York Stock Exchange this year, is considered a key factor for the listing's success. The price-to-earnings ratios (PER) of comparable companies, which serve as a basis for ARM's valuation, are very high: Nvidia (44.8x), Cadence (40.6x), Synopsys (35.3x), and AMD (29.6x).
Headquartered in Cambridge, UK, ARM holds core technologies in semiconductor design, acting as the "brain" of IT devices such as PC central processing units (CPUs) and smartphone application processors (APs). SoftBank acquired ARM in 2016 for $32 billion. Initially, SoftBank planned to sell ARM to Nvidia for up to $40 billion in 2020, but the deal was canceled due to opposition from regulatory authorities worldwide. Instead of selling, SoftBank shifted its strategy to listing ARM on the US stock market to recover funds.
Currently, SoftBank is reportedly negotiating to reacquire the 25% stake it sold to Vision Fund 1 ahead of ARM's IPO.
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