The troubled public offering of Brit chip designer Arm looks set to be delayed until sometime next year, amid fears that worsening economic conditions may make investors reluctant to buy into the company.
Arm was set to be floated on the stock market within the current fiscal year following the collapse of its sale to Nvidia by owner SoftBank back in February, but that time frame now appears to be out of the window, and there is some speculation that the IPO may not happen at all.
Reports in the UK media over the weekend indicated Arm had been in contact with shareholders to inform them that the IPO would not take place until well into next year. SoftBank had previously said that it intended to pursue a public offering for Arm within the fiscal year ending March 31, 2023.
Arm confirmed to The Register that the company’s flotation onto the stock market is likely to be delayed, but claimed that the process is still going ahead. Parent company SoftBank was not immediately available for comment.
“Given the state of the financial markets, it is unlikely that Arm will list in Q1 of 2023,” a spokesperson told us. “However, we are well advanced in our IPO readiness process and we remain fully committed to a 2023 listing.”
However, as we reported last week, SoftBank CEO and chairman Masayoshi Son claimed in the company’s Q2 earnings report that he was devoting his life to growing Arm as a business over the next several years, raising the question of whether the IPO may be postponed for longer or even ditched completely.
“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,” Son is reported as saying, in a speech that made no mention of the IPO at all.
Previous reports had indicated that SoftBank might be planning to keep a controlling stake in the chip design outfit after its public offering, rather than divesting itself of all Arm’s shares during the IPO process.
This may explain why SoftBank was originally proposing to value Arm at up to $60 billion for the purposes of its public offering, but lower figures in the region of $40 billion to $50 billion are now being quoted in various media reports.
Arm itself recently reported record royalty revenue of $463.2 million for its quarter ended September 30, although the company’s total revenues were down due to a fall in licensing as the company tries to diversify beyond its smartphone and mobile device strongholds and see its chip designs adopted more broadly, such as in PCs and the datacenter.
The company is also now embroiled in a legal dispute with licensee Qualcomm over the latter’s acquisition of chip company Nuvia, which had designed its own datacenter-class processor cores based on the Arm architecture.
Arm claims that Qualcomm does not have approval to use the Nuvia designs, and that the terms of the license agreement require this. Qualcomm has made counterclaims that Arm is seeking to completely overturn its existing model and bypass chipmakers. ®