Japanese technology group Softbank is taking one of Europe’s most successful technology companies, British microprocessor developer ARM, to the stock market on Thursday. The company is valued at $52.3 billion, with Softbank selling a 10% stake, and investor interest is high.
The share price for this IPO was set at $51. Softbank can raise a maximum of $5.22 billion.
Softbank bought ARM in 2016 for $32 billion and decided to take it public in 2022 after an idea to sell it to Nvidia fell through because regulatory hurdles were too tough.
Softbank invested in ARM, also increased the number of employees, and the value of the company ended up being more than 50% higher than seven years ago.
ARM has 6,000 employees and had $2.68 billion in revenue and $524 million in net income last year. Engineers make up 89% of all employees.
The numbers are not very high, but ARM is an important company for the electronics market, being a real “patent factory”.
ARM does not have a processor factory, but it is a company of strategic importance thanks to its designs and inventions, which are found in 99% of smartphones, two-thirds of the various objects connected to the Internet, and 40% of cars. The company estimates that 70% of the world’s population uses products that contain ARM-developed technology.
ARM engineers develop the basic design of the circuits that make up the processor, the company does not manufacture the chips but sells the intellectual property to interested parties, and each company then modifies the circuits as needed.
ARM’s listing on the New York Stock Exchange is the largest listing of the year on Wall Street and the most significant listing of a technology company in recent years. It’s the biggest listing since 2021, when automaker Rivian was valued at $66 billion at the time of listing.
Three years ago, Arm was on the verge of being sold to Nvidia, and Arm is now valued at $52 billion, even if some investors are skeptical of that valuation.
Nvidia was ready to buy Arm for 40 billion dollars. Nvidia is now one of the most successful companies in the world, valued at $1.2 trillion. It benefited greatly from the demand for superprocessors for AI applications.
ARM was founded in 1990. It has also had quarters of more than $700 million in revenue, whereas 5-6 years ago it rarely exceeded $500 million.
Sources: AFP, Le Monde
Source: Hot News
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