Arm IPO kicks off today with CPU slinger valued at $54.5B The long anticipated Arm flotation is set to kick off today with shares being offered to the public at $51 apiece, putting a value on the company of $54.5 billion. Britain's chip design and licensing outfit said in a statement that its shares are expected to begin trading on the Nasdaq Global Select Market in New York on …
To summarise, Softbank bought Arm in 2016 for ~twenty years worth of ARM's yearly revenue and ~64 times their yearly profits, presumably hoping to shove up the licensing fees to make up for this, however when they tried to quadruple the license fees people started looking at switching to other things (eg RISC-V) and Softbank realised that they'd fucked up and dropped the prices back again leaving them with a business they'd hugely overpaid for.
So to improve matters, they sold a majority stake in ARM China to entities controlled by the Chinese Communist Party in 2018.
They are then surprised that the above has rather different objectives to Softbank, and that the China operation is now operating for the benefit of China rather than the ARM board. They then try and recoup their huge capital investment by selling ARM to NVIDIA, who would only want it to try and create a tech monopoly ala Intel. This is rightly blocked by competition authorities to maintain some semblance of competition. Softbank is still stuck with a huge capital investment that is not going to pay off for a century or so and so is listing ARM to try and persuade idiots to buy it off of them at well above what it's objectively worth.
The FT published this article 6 months ago which contains this gem:
One official said: “The expectation was never very high for them to list in the UK. We would have basically had to rip up listing rules and dramatically water down corporate governance standards.”
The article and comments on it appears to give the impression that UK investors have a culture that does not encourage investing money in heavily overvalued companies with poor underlying financials, and our regulators [the FSA] don't like unbacked bombastic statements that inflate the value of a company, whereas poor underlying financials combined with bombastic statements drastically overvaluing companies appears to be accepted and encouraged in the US.
While we will of course "lose" those businesses to the US stock exchanges in the short term, when the bubble bursts on the hugely overvalued tech companies in the US then presumably there will be screamed questions at the regulators that enabled losing hundreds of billions.
While we will of course "lose" those businesses to the US stock exchanges in the short term, when the bubble bursts on the hugely overvalued tech companies in the US then presumably there will be screamed questions at the regulators that enabled losing hundreds of billions.
No, here in the US we've been pretty thoroughly conditioned to believe that any corporate regulation is pure evil, and any consequences to our personal financial status should be blamed on whichever politician of the other party has had his name in the news most recently.
No tech IPO this size has ever happened in London. Tech IPOs have always favoured the NASDAQ.
ARM was UK listed because it was much smaller at time it listed. It is less British AND a lot bigger than it was back then.
Even smaller tech businesses favour NASDAQ. I used to work for an Asian company that aimed at a NASDAQ listing one day. I asked one of the management why they did not consider London, and the answer was "why should we?" - because tech always goes for NASDAQ. Ironically, said company is now owned by the London Stock Exchange.
5% of ARM floated on Nasdaq. Another 5% was pre-hoovered by NVidia, Microsoft et al. 90% is still owned by SoftBank.
$5.4bn doesn’t even begin to cover the $15bn that SoftBank paid to the Saudi wealth fund for 25% of the company. It seems that none of this was the actual purpose of the IPO. The whole circus was just intended to *set a price* for ARM, and convince SoftBank shareholders that there is really any value at all in SoftBank.
ARM is still far from a public company.
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