Arm Ltd. is expected to unveil its initial public offering (IPO) as soon as Monday, according to Bloomberg, giving the market a peek into the chip designer’s financial health 7 years after it was acquired by SoftBank Group.
The IPO, scheduled for September, is on track to be the biggest of the year and could be one of the largest technology company listings ever on a US stock exchange.
Bloomberg News reported that Arm was targeting a valuation of between $60 billion to $70 billion in an initial public offering to raise between $8 billion to $10 billion, but that target may be lower since SoftBank decided. Keep more of the company after purchasing the Vision Fund share.
Arm will not have to disclose the proposed size and price for selling the shares until subsequent filings with the US Securities and Exchange Commission, according to what was seen by Al Arabiya.net.
The listing is set to be the largest in the United States since the $13.7 billion offering of electric vehicle maker Rivian Automotive in November 2021.
Arm’s emergence could spur dozens of startups like online grocery delivery company Instacart Inc. and marketing and data automation provider Klaviyo to pursue their IPO plans.
Arm sells the schematics needed to design microprocessors, and licenses technology known as instruction sets that dictate how programs communicate with those chips. The energy efficiency of Arm technology has made it ubiquitous in phones where battery life is critical.
Potential investors will examine how Cambridge, UK-based Arm plans to diversify beyond its own mobile chip designs, which are used by tech giants such as Apple and Amazon. While draft documents show Arm’s annual revenue fell 1% in the most recent fiscal year.
CEO Renee Haas has been directing the company to sign up more customers who make chips for computers, servers and data centers, an area more profitable than the mobile phone market.
The listing would be a welcome event for fee-hungry investment bankers, whose commissions and bonuses have shrunk with a dearth of IPOs this year.
In what is the worst year for IPOs in the US since the depths of the financial crisis in 2009, IPOs have raised $14.4 billion since January.
And Bloomberg reported that there are at least 28 investment banks participating in the IPO of Arm.
The IPO will include several strategic investors, who will buy about $100 million in common stock each, according to Bloomberg’s sources.
The lineup was not specified, but Arm customers and partners such as Intel, Nvidia and Amazon are among the candidates.