Saturday, June 15, 2024

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    Arm Aims for $4.87 Billion in US IPO, Valuing the Semiconductor Designer at Up to $52.3 Billion

    UK-based Arm Holdings Sets IPO Price Range Amid Strong Investor Interest

    Arm Holdings, the UK-based semiconductor designer, has outlined its plans for an initial public offering (IPO) in the United States, with the goal of raising up to $4.87 billion and achieving a valuation of up to $52.3 billion.

    IPO Details:

    • Arm intends to offer 95.5 million American depositary shares (ADS) in the IPO.
      The expected pricing range for each ADS is set between $47 and $51.
    • The stock will be listed on the Nasdaq under the ticker symbol “ARM,” with each ADS representing one ordinary share.
    • Following the IPO, there will be a total of 1.03 billion ordinary shares outstanding.
      This IPO pricing would value Arm at an estimated range of $48.23 billion to $52.33 billion.

    Lead Underwriters:

    • Barclays, Goldman Sachs, JPMorgan, and Mizuho are the lead underwriters for the IPO.

    Timing and Investor Interest:

    • Arm is going public at a time when investor interest in IPOs remains strong. The Renaissance IPO ETF has gained 6.6% over the past three months, outperforming the S&P 500, which has gained 5.7%.


    • Last year, Nvidia’s attempted $40 billion acquisition of Arm was unsuccessful, and Nvidia
    • paid a $1.36 billion breakup charge after the US Federal Trade Commission blocked the deal. Nvidia also secured a 20-year license to Arm’s technology for $750 million.
    • Arm Holdings, owned by Japan’s SoftBank Group, is known for its chip architecture and technology.
    • Arm’s IPO is anticipated to be one of the largest of the year, with reported efforts to raise $8 billion to $10 billion at a valuation of $60 billion to $70 billion.
    • Tech giants such as, Intel Corp, and Nvidia are reportedly among the potential anchor investors.

    Arm’s Importance in the Semiconductor Industry:

    • Arm’s architecture differs from the traditional x86 architecture pioneered by Intel.
      The company has shipped over 250 billion Arm-based chips since its inception in 1990, with 30.6 billion chips shipped in fiscal 2023.
    • Arm plays a crucial role in AI and machine learning, running workloads in billions of devices, including smartphones, cameras, cars, and data centers.
    • Arm collaborates with notable companies like Alphabet, GM’s Cruise, Mercedes-Benz, Meta Platforms, and Nvidia to deploy its technology for AI workloads.

    Arm’s IPO is expected to be a significant event in the semiconductor industry, reflecting the growing importance of AI and machine learning in computing.

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