as part of the IPO Arm will be valued at $50-54 billion – Kommersant

Arm intends to set the starting price of its shares in the initial offering on Nasdaq in the range of $47 to $51, reports Reuters citing own sources. Thus, the company itself will be valued at $50-54 billion, which is much lower than previous estimates.

British microprocessor developer Arm, owned by Japanese company Softbank, in late August informed on filing for an IPO in the United States. The bid indicated that Softbank intended to sell about 10% of Arm’s shares. At the same time, the company expected that it would be valued at $60-70 billion, that is, approximately in the same range as the price at which the microchip maker was acquired by Softbank in 2016. Then the Japanese company paid $32 billion for a controlling stake in Arm, and the entire company was valued at $64 billion.

The microprocessors developed by the British company are used in almost all smartphones, and Arm’s share in this market exceeds 99%. That is why among the already signed investors are all the largest manufacturers of electronics and processors – Apple, Nvidia, Alphabet, AMD, Intel and Samsung Electronics.

Meanwhile, Arm’s financial performance is now disappointing for investors. For the fiscal year ended March 31, the company’s revenue fell 1% to $2.7 billion. Net profit fell 5% to $524 million. In addition, the company indicated in its IPO filing that it was “particularly vulnerable to economic and political risks” affecting China, the world’s largest smartphone market. And this market accounts for 24% of Arm’s revenue.

Based on this, according to Reuters, the company decided to reduce the starting price request for its shares, but if interest in the IPO is high, the company may revise at the last moment the proposed price of its shares during the placement.

Kirill Sarkhanyants