SoftBank to cash in on ARM’s IPO, the biggest tech listing of the year

SoftBank Group Corp., the Japanese conglomerate that owns a majority stake in British chip designer Arm Ltd., is planning to take the company public in a blockbuster initial public offering (IPO) as soon as September, according to Bloomberg News.

Arm, which designs the chips that power most of the world’s smartphones, tablets and other devices, is targeting a valuation of between 60 billion and 70 billion in the IPO, which would make it one of the largest listings of the year.

The roadshow for the IPO is scheduled to begin the first week of September, and the shares are expected to trade on the Nasdaq stock exchange under the ticker symbol ARM, Bloomberg reported, citing people familiar with the matter.

The IPO would mark a milestone for SoftBank, which acquired Arm for $32 billion in 2016, in one of its biggest bets on the future of technology. SoftBank has been looking to monetize its investment in Arm amid pressure from activist investors to improve its balance sheet and share price.

Arm is seen as a key player in the fast-growing market for artificial intelligence (AI) chips, which are used for tasks such as speech recognition, computer vision and natural language processing. Arm’s chip designs are licensed by leading tech companies such as Apple Inc., Samsung Electronics Co. and Qualcomm Inc., as well as emerging players such as Nvidia Corp. and Amazon.com Inc.

Arm’s revenue rose 9% to 1.9 billion in the fiscal year ended March 31, while its operating profit jumped 35% to 514 million, according to SoftBank’s financial results. Arm said it shipped 22.8 billion chips in the same period, up 8% from a year earlier.

The IPO would also provide an opportunity for Arm’s employees and shareholders to cash in on their stakes in the company. Arm has about 6,000 employees worldwide, and about 3,000 of them are based in the U.K., where it was founded in 1990.

Arm’s IPO would follow a wave of successful listings by tech companies this year, such as Coinbase Global Inc., Roblox Corp. and UiPath Inc., which have benefited from strong investor demand and favorable market conditions. The Nasdaq Composite Index, which tracks many tech stocks, has gained about 14% so far this year.

However, Arm could also face some challenges and risks in its IPO journey, such as regulatory scrutiny, competitive pressure and legal disputes. Arm is currently involved in a patent infringement lawsuit with Intel Corp., which accuses Arm of violating its patents on chip technology. Arm has denied the allegations and countersued Intel for patent infringement.

Arm could also face regulatory hurdles in some of its key markets, such as China and Europe, where it may need to obtain approvals for its IPO and its business operations. Arm has been caught in the crossfire of the U.S.-China trade war, which has affected its ability to license its technology to some Chinese customers.

Additionally, Arm could face increased competition from rivals such as Intel and AMD Corp., which are also investing heavily in AI chips and expanding their presence in the mobile and cloud markets. Arm may need to innovate faster and diversify its revenue streams to maintain its edge in the chip industry.

Despite these challenges, Arm’s IPO is likely to attract strong interest from investors who are looking for exposure to one of the most influential and innovative companies in the tech sector. Arm’s IPO could also boost SoftBank’s reputation as a visionary investor and a global leader in AI.

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