Arms Holdings, the UK’s Largest Tech Firm Lists on the US NASDAQ

Arm Holdings, the chip design company controlled by Softbank, jumped nearly 25% during its first day of trading, Thursday, after selling shares at $51 a piece in its initial public offering.

At the open of trading on the NASDAQ, Arm Holdings was valued at almost $60 Billion. The company, trading under ticker symbol “ARM,” sold about 95.5 million shares. SoftBank, which took the company private in 2016, controls about 90% of shares outstanding.

Shares in British semiconductor designer Arm surged almost 25% on its first day of trading, following its long-awaited IPO on the Nasdaq. At a $60 billion valuation, Arm’s price-to-earnings multiple would be over 110 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% growth forecast for the current quarter.

The listing of the UK’s largest tech company on the NASDAQ is a blow to the London Stock Exchange. despite intense lobbying from UK politicians. Chief executive Rene Haas has said the company will keep its material intellectual property, headquarters in Cambridge and operations in the UK.

Jamie Urqhuart is a co-founder of Arm and previously held chief operating officer and chief strategy officer roles at the business. He told BBC Radio 4’s Today programme that it was clear that London was not the right market for Arm and the decision to not list here was “as an indictment of the economics” referring to the UK economic and labour outlook.

Mr Urqhuart also suggested that British export restrictions on technology risked holding back the industry going forward. A star of the British tech industry, 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.

The company is owned by Japanese investment giant Softbank, which took over the company in 2016 in a deal that valued the firm at $32bn. Prior to the purchase, it was listed in both London and New York for 18 years.

The share price has slipped from it’s high of $66.28 to around $55.50 in recent days, since the high it achieved on the share’s listing, last Thursday 15th September 2023

(Source: CNBC / BBC)

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