1025Connect: Arm might be worth up to $52 billion after its IPO

Sep 06, 2023 | Posted by Abdul-Rahman Oladimeji

Arm intends to price its initial public offering (IPO) between $47 and $51 per share, which could generate up to $4.9 billion for SoftBank. The IPO would value the semiconductor designer up to $52 billion, exceeding the $32 billion SoftBank paid for in 2016 but falling short of the $64 billion SoftBank had previously indicated it would list the company for. Following the IPO, SoftBank will continue to own 90.6% of the company.

The decreased valuation results from fund managers and analysts pointing to flat revenues, a 50 percent decline in profits in its most recent quarter, and the lack of clarity regarding the company's position in the data center and artificial intelligence markets. Google, Apple, Nvidia, Samsung, Intel, TSMC, AMD, MediaTek, Cadence, and Synopsys, however, intend to purchase up to $735 million worth of shares at the IPO price.

Arm licenses its Instruction Set Architecture (ISA) to others, including many proposed cornerstone investors. This has helped the chip designs become, by a comfortable margin, the most widely used ISA in the world, with the company asserting that 250 billion chips were sold by the conclusion of last year.