In a big move, chip design company Arm is gearing up for a major stock market debut on the New York Stock Exchange (NYSE).
They’re aiming for a valuation between $47 billion and $51 billion. Arm recently filed updated documents with the U.S. Securities and Exchange Commission (SEC) outlining their IPO plans, which could raise about $4.87 billion.
Arm, a British company that was once listed in both London and New York, has had an eventful history, with SoftBank buying it for $32 billion in 2016. Now, Arm is eager to become a publicly traded company in the United States once again.
As part of this shift, Arm now qualifies as a foreign private issuer in the U.S., and their shares will be American depositary shares (ADSs).
They plan to list 95.5 million ADSs at a price range of $47 to $51 per share. If they reach the higher price, it could bring in $4.87 billion in new capital. Even at the lower end, the IPO would still raise an impressive $4.49 billion.
Going public in New York will give Arm access to a large pool of institutional funds, which will help them invest more in research and development. Their focus includes expanding in the growing field of artificial intelligence with innovative chips.
If Arm hits the higher end of the price range, they could reach a total valuation of $52 billion, according to CNBC’s estimates. Even if they stay at the lower end, their valuation would still be just below $50 billion.
However, it’s important to note that only 9.4% of Arm’s shares will be traded freely on the NYSE, with SoftBank holding about 90.6% of the shares after the IPO.
Additionally, the underwriters for the IPO have the option to buy up to 7 million more American depositary shares, valued at $735 million. If they choose to do so, SoftBank’s ownership in Arm will decrease to 89.9%, according to the company’s statement.
Arm’s journey toward its major U.S. IPO is a crucial moment for the chip design company. It represents an opportunity to secure significant funding for future growth and innovation in the ever-evolving world of technology.