Arm cutting previous market value projection to around $50bn

In a regulatory filing on Tuesday, Arm said it was selling 95,500,000 shares in the deal at a price expected to be between $47 and $51 per share. That would put its market value at between roughly $50bn and $54bn. The news came amid a meeting with the British company and investors ahead of the long-awaited stock market float in New York pegged for next week. Despite the drop, the listing on the Nasdaq exchange is still tipped to be the largest of the year.

An ongoing chip war between the US and China and rising interest rates have made investors mark down the value of future earnings, and have made fundraising more difficult. However, 28 banks including the likes of JP Morgan, and tech giants like Google and Apple, have shown keen interest in the upcoming listing.

SoftBank will sell a little under 10% of its stake in Arm, retaining more than 90% in order to steer the development and production of chips used in the expanding AI market. Last month, rival chip-maker Nvidia saw record-high sales as demand for its AI chips heated up.
Arm was previously poised to be sold to Nvidia in a deal worth about $40 billion, but it was scuppered in 2022 after authorities raised competition concerns.

Arm, which designs chips for devices including smartphones and game consoles, is seeking to raise nearly $5bn in the listing in the US. The choice to float on a US exchange came following failed lobbying attempts by UK Prime Minister Rishi Sunak to get the company to list in London. Arm state they will keep other elements of their operations, like intellectual property and headquarters in the UK.

Arm was previously listed on both the London and New York stock market for 18 years, but Its 2016 purchase by Softbank saw the company become private. When talks to float it returned, the company centred on a US-only listing.

Arm Holdings estimates that 70% of the world's population uses products that rely on its chips, including nearly all of the world's smartphones. Arm's sales declined to $2.68 billion in the year ending 31st March, hurt by a slump in global smartphone shipments.