Published - September 4th, 2023 @ 10:15 AM (GMT+2)
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‍Adjusted Valuation Ahead of IPO:
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UK-based semiconductor design firm Arm has revised its valuation expectations downward in preparation for its upcoming initial public offering (IPO) on the Nasdaq. The company now aims for a valuation range of $50 billion to $55 billion, a reduction from the $64 billion figure previously announced by its parent company, SoftBank.

Arm is set to engage with potential investors in the days leading up to its IPO, which could happen as early as next week. The company's chip designs are integral to the majority of the world's mobile phones, making it a significant player in the global semiconductor market.

Since 2016, Arm has been under the ownership of Japanese investment firm SoftBank, which acquired it for £24 billion. Industry analysts believe that the company's valuation has increased since then, partly due to the growing importance of artificial intelligence in chip design.

Strategic Importance & Investor Interest:
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Arm's chip designs are crucial for tech giants like Apple and Samsung. Several of Arm's clients, including Apple, Samsung, Nvidia, Advanced Micro Devices, Intel, Cadence, and Alphabet, are reportedly interested in buying shares during the IPO to exert more influence over the company.
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Previous Deal Failures & Valuation Attempts:
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SoftBank had previously attempted to sell Arm to Nvidia for $40 billion, but the deal was blocked by regulators over competition concerns. SoftBank has also tried to convince investors that Arm could be worth as much as $80 billion.

Market Conditions & Financial Institutions Involved:
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The IPO comes at a time when the market for public offerings has cooled, partly due to rising interest rates affecting future earnings valuations. However, 28 leading banks, including Barclays, Goldman Sachs, and JP Morgan, are expected to generate significant fees from the IPO.

Listing Venue & Geopolitical Implications:
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The IPO will take place on the Nasdaq, despite efforts by UK Prime Minister Rishi Sunak to have the company relist on the London Stock Exchange. SoftBank is expected to retain up to 90% ownership post-IPO, maintaining its significant influence in a sector that has geopolitical implications, especially between the U.S. and China.
Arm disclosed that a quarter of its revenue comes from China, making it susceptible to policy changes in the region.

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ARMS's Potential Investors and Nasdaq's Upcoming Listing, Read More:

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