The chip designer has told shareholders the issuance of an initial public offering (IPO) will take place later in 2023 than initially planned
According to reports today, Arm has written to private shareholders to inform them that plans to issue an IPO have been delayed, citing the unfavourable global economic climate.
Previously, Arm had been targeting the IPO for Q1 of next year, though this delay should not come as too great a surprise; earlier this month, with Arm’s parent company, Softbank Group, hinted at delaying the IPO during their own investor call.
Analysts have previously suggested that an IPO could value Arm up to $40 billion, with Softbank loath to begin the sale when investor appetite is muted by the strained global economy.
The exact length of the delay to the IPO process is unclear, but Arm told investors that it was “unlikely” to take place in Q1 2023 as hoped.
“Clearly, we want to IPO as soon as is possible. But given the current global economic uncertainty, given the state of financial markets, that’s probably now unlikely to happen before the end of March 2023,” explained Ian Thornton, Arm’s head of investor relations, in the letter to investors. “However, preparations for the IPO are going very well. They’re advanced. And we are fully committed to floating sometime in 2023.”
Softbank, itself struggling under the weight of a number of poor investments exacerbated in recent years by the pandemic, has been mulling its options with Arm for some time.
A controversial deal was struck in 2020 to sell Arm to its US rival Nvidia for $40 billion, but the deal was ultimately scrapped in February 2022, with Softbank claiming that the strict regulatory hurdles were too hard to surmount.
An IPO has been the preferred alternative ever since, with the UK government notably lobbying for the move to make the London Stock Exchange more competitive with its international rivals.