SoftBank’s Arm Gears Up for 2023’s Biggest IPO: A Second Shot at Public Listing with High-Stake Prospects
August 22, 2023
The landmark initial public offering (IPO) of 2023 is underway. Arm, a chip designer owned by SoftBank, is making history with the largest IPO in two years. It recently submitted a preliminary prospectus for a Nasdaq listing set for early September. This development could potentially lead to a significant profit for SoftBank (OTCPK:SFTBY) founder Masayoshi Son, despite the substantial financial losses his Vision Fund endured in the previous year. Notably, this is Arm’s second foray into public trading; the company first went public in 1998, prior to its 2016 acquisition by SoftBank for $32B. The company’s worth could currently be double that figure. (Topic update…)
Arm’s Market Presence and Forecast
Arm’s reach spans across multiple industries, with its circuit designs and chip architecture found in nearly every smartphone and numerous personal computers, automobiles, servers, and networking equipment. Although the company’s profits have slightly declined in recent months due to a decrease in electronics and overall chip sector demand, the future remains promising. Industry projections predict a significant surge in computer power, driven by big data and artificial intelligence advancements. Arm asserts that “approximately 70% of the world’s population uses Arm-based products,” and anticipates nearly a 7% annual market growth, potentially leading to an approximate worth of $247B by the end of 2025.
Challenges and Potential Investors
Despite these optimistic projections, Arm will need to overcome certain hurdles, including exposure to China and open-source architecture groups. In an effort to elevate its visibility, Arm has reportedly engaged several major tech companies about potentially becoming anchor investors. These firms include Amazon (AMZN), Apple (AAPL), and Intel (INTC), in addition to Nvidia (NVDA) — a company that had previously attempted to acquire Arm for $66B before facing regulatory pushback.
The outcome of Arm’s IPO will serve as an important indicator for investors, issuers, and bankers gauging the sustainability of the recent IPO market resurgence. While there has been a noticeable level of optimism surrounding smaller IPOs, such as the restaurant chain Cava (CAVA) and AI beauty venture Oddity Tech (ODD), larger entities may tread carefully, waiting to discern whether the market is truly on the rebound before they leap into action.