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The Arm IPO, likely being postponed

Wednesday, November 23, 2022

The Arm IPO, expected in Q123, looks like being postponed.

Arm’s head of investor relations, Ian Thornton, has told investors that a Q1 IPO is unlikely citing economic conditions as the reason.

SoftBank CFO Yoshimitsu Goto says Arm is “a great company, great asset, so that we would like to make sure that we have a great preparation in the market. That is why we don’t have to rush.”

While SoftBank. CEO, Masayoshi Son said recently: “”In the coming few years, I only like to focus on this thing. So the next explosive growth of Arm is something that I would like to concentrate on, and I devote myself into that.” Which suggests Softbank might hang into Arm for a few more years.

In October, Arm laid off 20% of its UK workforce of 3,500 employees and 18% of its global workforce of 6,950 people.

In October it was reported that Son had visited Samsung to suggest a deal, but none materialised.

In the quarter to the end of September Arm reported a drop in licensing revenue and overall revenue.

SoftBank has $140 billion debts losing $22 billion in the April-June quarter and has been selling off its stake in Alibaba which underpinned Son’s investment strategy.

Softbank once owned 25% of Alibaba – a stake which at one time was worth nearly $200 billion but which now, after a falling Alibaba share price, and share sales by Softbank, has been whittled down to a 14.6% stake worth $34 billion.

SoftBank paid $32 billion for Arm and current market conditions suggest it might not make a profit on the deal if it IPO’d now. A successful sale of Arm would, however, help SoftBank’s finances considerably.

By: DocMemory
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