British processor architecture developer Arm is set to go public in the US this week, and according to sources familiar with the Financial Times, the volume of applications was five times higher than the number of shares being brought to market. In this regard, it was decided to stop accepting applications from event subscribers a day earlier.
Image source: Bloomberg, David Paul Morris
However, as he explains editionThe offering price will be announced later on Wednesday, and there is some chance that Arm shares managed to trade at or even above the upper end of the $47 to $51 range. According to preliminary estimates, Arm’s capitalization is valued at $54.5 billion, and parent company SoftBank will earn about $4.9 billion from this event after paying all commissions and related costs. After the IPO, SoftBank will still hold 90% of Arm shares, but the Japanese group will try to get the maximum benefit from the placement without increasing the proportion of shares listed on the stock exchange.
In its investor prospectus, Arm announced before the IPO that it wanted to expand its presence in the cloud computing segment, in which the company currently has no more than 10%. The company’s revenue in this area is expected to grow 17% annually through 2025, primarily due to advances in artificial intelligence. In the automotive market, Arm controls about 41% of the market but is on track to grow its revenue by 16% annually. At the same time, the mobile device market, which accounts for the majority of Arm’s revenue, will grow at just 6% per year over this period. Arm derives its primary revenue from royalties; in the last fiscal year they accounted for $1.68 billion of total revenue of $2.68 billion. Arm derived nearly a quarter of its revenue from the Chinese market, which many analysts now associate with some political uncertainty.
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