Chip design firm Arm is preparing for its highly anticipated initial public offering (IPO) on the New York Stock Exchange, with plans to raise a staggering $4.87 billion. The IPO could potentially value the British company at an impressive $52 billion.
Arm, which is qualifying as a foreign private issuer in the US, is set to list 95.5 million American depositary shares (ADS) at a price range between $47 and $51. At the higher end of the range, the IPO has the potential to generate up to $4.87 billion, while at the lower end, it would bring in $4.49 billion.
The chip design firm intends to utilize the funds raised from the IPO to further its investments in research and development, particularly focusing on the rapidly growing artificial intelligence sector. This move aligns with Arm’s strategy to stay ahead of the curve and remain a dominant player in the technology industry.
If the IPO proves successful, SoftBank, Arm’s parent company, is expected to retain approximately 90.6% ownership of the firm. This leaves only 9.4% of the shares to be freely traded on the NYSE, indicating SoftBank’s confidence in Arm’s future prospects.
Underwriters for the listing also have the option to purchase an additional 7 million ADS. If exercised, this option would reduce SoftBank’s ownership to 89.9%. This flexibility allows SoftBank to maintain a significant stake in Arm while capitalizing on potential market demand.
As the IPO approaches, industry experts are closely watching Arm’s performance. The company’s reputation for high-quality chip designs, coupled with its strategic focus on artificial intelligence, positions Arm as a key player in the global technology landscape. With the potential to raise billions and an expected high valuation, Arm’s IPO could have a significant impact on the market and solidify the company’s place among industry giants.
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