British chip designer Arm ready for £40 billion Wall St debut
British chip designer Arm ready for £40 billion Wall St debut
British chip designer Arm will begin trading on Wall Street today in what is expected to be the biggest US public listing of the year.
The semiconductor company has attracted enough investor support to reach the top end of the price range of £37.60 to £40.80 per share, which would value Arm at more than £40 billion.
Just 10 percent of shares in the Cambridge-based company are expected to trade in New York today, raising around £4 billion for Japanese owner SoftBank, which will retain a 90 percent stake.
The company reportedly closed its order book early Tuesday, indicating strong demand for the shares, most of which comes from institutional investors and tech giants such as Apple, Nvidia, Google, Intel and Samsung Electronics.
Marketing efforts for the IPO are aimed at institutional investors, forcing retail savers to buy shares at potentially higher prices once they start trading, Reuters said.
Float: Arm has received enough investor support to reach the top end of the price range of £37.60 to £40.80 per share, which would value Arm at more than £40 billion
Susannah Streeter, head of markets at Hargreaves Lansdown, said: ‘The first chance that UK investors will get their hands on a share of the company will be when the company starts trading on the NYSE and therefore they should be prepared for volatility that can often strike. shares after a launch on the stock market.
“Retail investors hoping for a front-row seat in Arm’s coming journey should be aware that the future AI landscape is difficult to map.”
Arm’s core business is designing chips for smartphones – the company has a 99 percent share of the mobile phone market – and hopes to expand its reach in cloud computing and artificial intelligence.
The British company’s decision to go public in the US was a blow to the London Stock Exchange.
The company was founded in Cambridge in 1990 and was part of the FTSE 100 when it was listed in London and New York between 1998 and 2016, before being acquired by SoftBank.
The Japanese investor had planned to sell Arm to rival US chipmaker Nvidia in 2020, but the £31 billion deal fell apart after hitting regulatory hurdles.
After the deal collapsed, British politicians lobbied SoftBank for a dual listing in both London and the New York Stock Exchange. But SoftBank rejected the city in March, saying New York was the “best path forward.”
US listings have become increasingly popular for technology entrepreneurs, helping them achieve higher valuations.
Streeter added: ‘Arm was seen as a British success story, but owner SoftBank is unsentimental and wants the best value for money.’
The city suffered another setback on Tuesday when packaging giant Smurfit Kappa said it would move its premium listing from London to New York as part of a merger with US WestRock, meaning it will leave the FTSE 100 index.
Construction supplier CRH has also announced plans to move its primary listing to New York later this month and plumbing supplier Ferguson moved its listing to the US last year.