IPO Semiconductors and 5G

SoftBank’s Chipmaker Arm Holdings Muscles Its Way Toward IPO

Illustration of IPO Bubble letters.

Like a phoenix from the ashes, Arm Holding’s long-awaited blockbuster IPO is finally taking flight after the SoftBank-acquired semiconductor manufacturer confidentially filed with the SEC for a U.S. stock market listing this weekend.

The move sets the stage for this year’s largest initial public offering so far. Arm reportedly plans to sell its shares on Nasdaq later this year. The company hopes to raise between $8 billion and $10 billion, according to reports.

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In a statement, which confirmed an earlier Reuters report on the planned IPO, Arm said the size and price range for the offering has not yet been determined.

It’s a pretty treacherous quest the U.K.-based company is embarking upon. Not only has the semiconductor sector seen its fair share of challenges, economic uncertainty and stock market volatility has put off many other IPO contenders.

Overall, U.S. IPOs — excluding listings for SPACs — are down about 22% to a total of just $2.35 billion year-to-date, according to Dealogic.

For its part, Arm’s business has reportedly weathered better than the broader chip industry. Its sales were up 28% in its most recent quarter, according to the company. Its focus on data center servers and personal computers that generate higher royalty payments is largely credited with its positive performance.

Please, we want IPOs

Industry watchers (and business journalists alike) have been hyped by recent news and rumors of news about several IPOs. 

We saw this enthusiasm last week when Johnson & Johnson, which owns popular drugstore brands like Tylenol, Band-Aid and Neutrogena, announced it will spin off its consumer health division, Kenvue, and launch it on the public markets after raising $3.5 billion. If that happens the company will be valued at $40 billion.

And let’s be honest, SoftBank needs a win. 

A well-received Arm public offering would certainly boost the coffers of SoftBank after it reported a humbling $5.6 billion loss related to its Vision Fund. That announcement was made just months after SoftBank CEO Masayoshi Son took responsibility for the poor performance of SoftBank’s investments, saying he had become “delirious” with the high returns the funds were seeing at the height of the market.

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Illustration: Dom Guzman

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