Arm, the chip maker owned by SoftBank Group Corp, has filed confidentially for an IPO on the U.S. stock market. The move comes after SoftBank announced in March that it planned to list Arm in the U.S. market. The IPO registration shows that SoftBank is proceeding with the offering despite adverse market conditions. Arm reportedly plans to sell its shares on Nasdaq later this year, seeking to raise between $8 billion and $10 billion. The size and price range for the offering has not yet been determined.
Market conditions
U.S. IPOs, excluding listings for special purpose acquisition companies, are down about 22% to a total of just $2.35 billion year-to-date, according to Dealogic. This is due to stock market volatility and economic uncertainty, which have put many IPO hopefuls off. The exact timing and size of Arm’s IPO are subject to market conditions, and there are signs that the IPO market is beginning to improve. Johnson & Johnson is preparing to list its consumer health business Kenvue in New York next week, hoping to raise about $3.5 billion.
SoftBank’s turnaround efforts
Arm’s IPO is expected to boost the fortunes of SoftBank, which is trying to turn around its Vision Fund after losses due to declining valuations of many of its holdings in technology startups. Arm’s business has fared better than the broader chip industry thanks to its focus on data center servers and personal computers that generate higher royalty payments. The company said sales were up 28% in its most recent quarter. Arm’s IPO preparations are being led by Goldman Sachs, JPMorgan Chase & Co, Barclays and Mizuho Financial Group. SoftBank and Arm declined to comment.
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