British chip designer Arm Holdings is forgoing its home market and plans to list shares in New York later this year, according to multiple media reports.
The planned initial public offering (IPO) is a blow to the British government and the London Stock Exchange. Arm will likely be publicly listed on the tech-focused Nasdaq stock exchange within the fiscal year ending March 31, 2023, according to Japan’s SoftBank (TYO:9984), which currently owns Arm Holdings.
Arm was spun out of an early computing company called Acorn Computers in 1990. The company’s energy-efficient chip architectures are used in roughly 95% of the world’s smartphones and approximately 95% of the chips designed in China.
The company was dual listed in London and New York until 2016, when SoftBank bought it for $32 billion U.S. The U.K. government hailed the sale of Arm to SoftBank as a major success at the time but now it’s reluctant to see the semiconductor firm in the hands of an overseas company or listed on an overseas stock market.
After acquiring Arm, SoftBank tried to sell it to U.S. chip giant Nvidia (NVDA) but the companies announced on Tuesday that the deal collapsed due to “significant regulatory challenges.”
The British government and regulators wants the country’s biggest and best tech companies to list on home soil so that they can benefit from the wider economy and prop up the stock market. However, over the years, many have crossed the Atlantic to go public in New York, believing they will achieve higher valuations on the Nasdaq or the New York Stock Exchange.
The most valuable tech companies on the Nasdaq exchange all have a market values of over $1 trillion U.S. Meanwhile, the most valuable tech firms on the London Stock Exchange are all valued at less than $50 billion U.S.
Last year, a number of U.K. start-ups listed on the London Stock Exchange, but the IPOs didn’t all go to plan. Food delivery app Deliveroo, for example, saw its share price tank almost immediately after it went public.
There’s a possibility that SoftBank and Arm could opt for a dual listing again in London and New York. Either way, analysts are questioning whether SoftBank will be able to list Arm for the same amount of money that it was set to get from selling the company to Nvidia.
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