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Latest Arm IPO filing targets $52b valuation

Arm’s SEC IPO filing was updated this morning to propose a $47 to $51 share price. The British chip maker could be worth over $52 billion. As major hardware manufacturers have adopted its architecture, the company has had a good few years. Arm’s clients include Apple, Google, Samsung, NVIDIA, and AMD.

Arm’s technology is in nearly every smartphone, making it well-positioned to ride the AI buzz. Wall Street is excited about designing the silicon architecture that will power the next generation of mobile and desktop artificial intelligence, which has kept chipmakers like NVIDIA hot.

Arm wants to IPO for cash. The top pricing would generate $4.87 billion, which would likely fund future research and development.

The listing is driven by Softbank, which bought the company for $32 billion in 2016. After 18 years listed on Nasdaq and the London Stock Exchange, that acquisition took the company private. After this move, only 10% of Arm’s shares will be traded on the NYSE, with Softbank owning 90.6%. The company wants the “ARM” listing symbol.

Revenue for Arm increased by one-third in 2022. However, supply chain constraints and economic headwinds have slowed things down. These slowdowns raise concerns on Wall Street. The peak valuation of $52 billion is much lower than initial projections of $70 billion. The April IPO filing estimated $64 billion.

The latest March annual revenue was $2.68 billion. The 1% drop made many question the wisdom of such a potentially inflated valuation—it will take time to recoup that investment. The $47 to $52 price range is still a good increase from the $32 billion acquisition.

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