SoftBank Group is testing the interest of potential investors in the IPO of chip design company Arm, which will be officially launched in the third quarter of this year at the earliest, media reported Friday, citing people familiar with the matter. Considering Arm's chip concept attributes, as well as the story of Masayoshi Son's "comeback", the IPO has attracted a lot of attention from the start.
Sources close to the matter said that SoftBank may have in mind a fundraising amount of up to $10 billion, and may start offering shares as early as September this year.
Arm previously revealed that it had secretly filed a draft registration statement for the IPO filing with the SEC on April 30. The company said the size and price of the offering is to be determined, depending on market factors and regulatory approval. The draft filing reportedly lists Goldman Sachs, JPMorgan Chase, Barclays and Mizuho as the IPO banks, with more underwriting firms expected to follow to join the potentially largest IPO of the year for U.S. stocks.
As there have been many turbulent moments in the capital markets over the past six months, people familiar with the matter also said that the timing and valuation of Arm's IPO and the size of the fundraising still depends on the market conditions at the time. For this news, Arm, SoftBank, Goldman Sachs, JPMorgan Chase have declined to comment.
There is another reason for the market to focus on Arm IPO: the valuation of this company is indeed more difficult to calculate. According to estimates earlier this year, global investment bank analysts gave Arm a valuation range of $30 billion to $70 billion, and the dramatic fluctuations in share prices in the semiconductor industry have compounded the situation.
SoftBank Group bought Arm for $31 billion in July 2016, followed by a "stock + cash" deal with Nvidia in September 2020. Nvidia's stock price has soared as a result of the cryptocurrency surge, and the value of the deal to sell Arm has risen from an initial $38.5 billion to a maximum of $87 billion. However, due to antitrust regulation in multiple countries, the deal was questioned and Nvidia eventually had to abandon the deal.
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