The future of Arm is taking shape. SoftBank, the current owner, confirmed that it’s going public and retaining a majority stake.
Most CPUs are designed by either Intel or Arm. Though Intel remains the largest player by far, no one can ignore Arm. In 2021, market researchers from Mercury Research estimated that a quarter of all CPUs in desktops and servers were designed by Arm. That’s precisely why SoftBank, its current owner, wants to get rid of the organization.
In 2020, SoftBank ran into financial difficulties after a series of bad investments. SoftBank had stakes in WeWork (shared office spaces) and Uber, two parties that were hit hard by the COVID crisis. Arm is worth tens of billions, and therefore a life preserver. SoftBank decided to sell to Nvidia, but was stopped by regulators in February 2022.
The backup plan appears to be an IPO. Masayoshi Son, SoftBank’s CEO, recently confirmed that Arm will go public as soon as possible. Son added that SoftBank plans to retain a majority stake.
London or New York
The big question is where. Two candidates are eligible: the London Stock Exchange and the New York Stock Exchange. According to British media, Prime Minister Boris Johnson recently wrote to SoftBank in an attempt to sway the organization to London. Arm is British by origin. Yet, the chances of a British IPO are slim. SoftBank’s CEO previously indicated that all eyes are on New York.
Had the original sale to Nvidia gone through, SoftBank would be $40 billion richer. SoftBank is aiming for a valuation of 60 billion dollars for the IPO. The organization has been taking measures to reach that amount since March. SoftBank brought in financial specialists from Goldman Sachs and JPMorgan. Arm is being reorganised, resulting in job losses for 12 to 15 percent of all personnel.