Well, the wait is finally over. SoftBank’s Arm Holdings has just filed for a listing on the Nasdaq exchange, seeking a valuation that is at nosebleed levels.
To wit, Arm Holdings has now filed the requisite Form F-1 with the SEC, applying to list its American Depository Shares (ADSs) on the Nasdaq Global Select Market under the ticker symbol ARM. The company is targeting a valuation of between $60 billion and $80 billion, seeking to raise between $8 billion and $10 billion in cash. Given the preliminary nature of this filing, we currently have no definitive idea as to the company’s IPO price and exact valuation.
CNBC reporting that $ARM is targeting a $60-80 billion valuation with their upcoming IPO (possibly in September) however their trailing 12 month revenues were just $2.68 billion with $525 million of net income,…
— Jonah Lupton (@JonahLupton) August 21, 2023
ARM earned $2.68 billion in revenue for the year that ended on the 31st of March, 2023, corresponding to a marginal decline from the $2.70 billion that the company earned in the preceding year. For the just-concluded year, the company earned $524 million in net income from operations.
As per today’s filing, Arm is targeting a Total Addressable Market (TAM) of $202.5 billion. As a refresher, SoftBank-owned, UK-based Arm Holdings designs silicon chips and licenses instruction sets that govern how chips communicate. The company’s intellectual property – including its Reduced Instruction Set Computing (RISC) Instruction Set Architecture (ISA) – is utilized by the likes of Apple, Qualcomm, Samsung, and Huawei for their smartphone chips, ensuring market coverage of around 90 percent. Interestingly, the company took pains to incorporate the market’s current buzzword – AI – in its prospectus in the following words:
“We are leading the way in integrating AI and ML capabilities across all devices through our highly scalable architecture. All modern smartphones are AI and ML capable by virtue of their Arm processors, and we are increasingly working with companies in other markets, such as consumer electronics and automotive, to deploy AI-based solutions. For the networking, cloud and data center markets, we continue to add AI-specific features to our CPUs to enable market-leading performance.”
Arm mentioned the word “AI” 44 times in today’s prospectus.
— Kakashii (@kakashiii111) August 21, 2023
For the benefit of those who might not be aware, SoftBank had purchased ARM for $32 billion back in 2016. NVIDIA was slated to acquire ARM at a $40 billion valuation but was forced to walk away from the deal last year after facing stringent competition-related opposition from regulators around the world.