Arm, the avid chip designer, has decided to pursue listings in the US only in 2023. The decision by Arm to pursue a US-only stock listing in 2023 is a blow to the UK government’s hopes that Arm would return to the London Stock Exchange.
Arm, owned by the Japanese company SoftBank, had been listed on the LSE for over 18 years before its acquisition by Softbank. Arm did not rule out a London listing, but it said it would pursue an IPO in the US without providing any additional details.
The loss of Arm’s listing is a significant blow to the LSE. It has sparked criticism from some interested parties who feel that the government has allowed the company to fall into the hands of foreign investors without a fight. They are especially angry because the company is very successful with top-notch chips.
London Did Not Go Down Without a Fight
According to Reuters, London made significant efforts to secure Arm’s listing in the city, with the Prime Minister and the CEO of Arm meeting last month at Downing Street. Reports suggest that the Softbank CEO joined via a video call.
This move by Arm is not the first of its kind in the LSE, as CRH, the Dublin building materials titan, shifted its LSE listing to the US. However, this move highlights the UK’s need to hasten its reform plans.
According to Julia Hoggett, the UK needs to rapidly change the direction of its reform agenda and regulatory plans, including tackling available risk capital for growth in the country. But, according to the CEO of the massive company, LSE was different from what they planned, and the US was the place for them to drive a wooden stake into the hopes of British market participants.
The company’s shares grew 28% in Q4 to hit $746 million and will likely see more upticks as 2023 continues, and manufacturers are dashing to get their chips 5G enabled.
The company was founded in Cambridge in east England with bases in California and San Jose and retained Britain as the headquarters. The company makes most of the chips available today; if it is a gadget, you are probably using a chip made by Arm.
From iPhones to Android phones, they cater to the whole industry with their technology. SoftBank decided to purchase the firm after an expected deal failed to materialize. Nvidia was offering up to $80 billion. However, the move collapsed due to antitrust concerns in 2022.
However, Arm now identifies New York as its new home joining Qualcomm, Intel, and Nvidia. Arm represents a significant part of the market share and may continue to rise as smaller companies struggle with supply chain disruptions that are starting to subside.