Arm wants to use cash from planned IPO to fuel growth
(2022/06/28)
- Reference: 1656423046
- News link: https://www.theregister.co.uk/2022/06/28/arm_ceo_ipo/
- Source link:
Arm chief executive Rene Haas is looking to use funds generated by the expected IPO to expand the company, hiring more staff and potentially pursuing acquisitions.
The news comes amid speculation over whether the firm will be listed in London and New York exchanges following the sale.
Haas, who took over from previous CEO Simon Segars in February when the sale to Nvidia fell through, told the [1]Financial Times that he wanted to use proceeds from Arm's upcoming public offering to pursue deals and hire more staff.
[2]
The move would potentially position to begin Arm making acquisitions to help further ongoing efforts to move beyond existing strongholds in the mobile and embedded markets and to expand the company's footprint in the datacenter.
[3]
[4]
Cash generated through an IPO "can help with M&A or you can hire faster – we'll look at both of those areas," the FT quoted Haas as saying.
However, Arm had earlier been planning to lay off staff as a result of the planned public offering. The company was looking to lose about 1,000 staff worldwide – as detailed to employees [5]in an email from Haas himself – reportedly including cutting one in ten jobs in the UK side of the organization, equating to about 350 positions.
[6]
The news had led to Unite, one of the UK's largest unions, [7]calling on Arm's management to halt any such layoffs , saying that staff at the company are highly skilled technology workers and that the UK economy could not afford to lose those skills.
We asked Arm if the latest statement from Haas meant that the chip designer had reconsidered its plans to cull jobs, but the company has not yet responded.
Meanwhile, there has been controversy over where Arm will be listed following its IPO, with Masayoshi Son, chief executive of the chip designer's parent company SoftBank, indicating that the [8]Nasdaq stock exchange in New York is the favored location .
[9]Intel is running rings around AMD and Arm at the edge
[10]Arm most likely to list on the Nasdaq, says SoftBank CEO
[11]Inspur joins Arm gang with 2U box running Ampere silicon
[12]UK govt considers invoking national security in Arm IPO saga
"Most of Arm's clients are based in Silicon Valley and... stock markets in the US would love to have Arm," he told shareholders at the company's annual general meeting.
But the UK government has made it clear that it wants Arm to be listed on the London stock exchange, and recent reports claimed that it is considering the [13]threat of national security laws to force the issue with SoftBank.
[14]
This would mean applying the [15]National Security and Investment Act (NSIA), which came into force at the start of the year, in a bid to have SoftBank change its mind over listing Arm exclusively on the Nasdaq. The legislation gives UK ministers the power to halt mergers and acquisitions if it deems this necessary.
Critics, however, have pointed out that use of this legislation may not be appropriate in this case, and the UK government did nothing to stop the [16]sale of Arm to SoftBank back in 2016, which meant the company is already owned by a foreign entity.
SoftBank has previously stated that it aims to complete the Arm IPO within the current fiscal year ending March 31, 2023.
The company was said to be seeking to have the chip designer valued at up to $60 billion for the sale, but later reports suggested that SoftBank may aim to [17]keep a controlling stake in Arm as the company was unsure whether it would reach the full value if it divested itself completely of the Brit chip outfit in the current economic climate. ®
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[1] https://www.ft.com/content/2d565214-c1ba-4132-ac5e-3ddb74c9e4a0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2022/03/15/arm_job_cuts/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/03/21/uks_largest_union_to_arm/
[8] https://www.theregister.com/2022/06/24/arm_nasdaq/
[9] https://www.theregister.com/2022/06/27/intel_edge_amd_arm/
[10] https://www.theregister.com/2022/06/24/arm_nasdaq/
[11] https://www.theregister.com/2022/06/24/inspur_arm_2u_server/
[12] https://www.theregister.com/2022/06/22/uk_govt_arm_ipo/
[13] https://www.theregister.com/2022/06/22/uk_govt_arm_ipo/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2021/11/17/uk_government_publishes_guidance_national/
[16] https://www.theregister.com/2016/07/18/softbank_to_buy_arm_holdings_say_reports/
[17] https://www.theregister.com/2022/04/22/softbank_arm_ipo/
[18] https://whitepapers.theregister.com/
The news comes amid speculation over whether the firm will be listed in London and New York exchanges following the sale.
Haas, who took over from previous CEO Simon Segars in February when the sale to Nvidia fell through, told the [1]Financial Times that he wanted to use proceeds from Arm's upcoming public offering to pursue deals and hire more staff.
[2]
The move would potentially position to begin Arm making acquisitions to help further ongoing efforts to move beyond existing strongholds in the mobile and embedded markets and to expand the company's footprint in the datacenter.
[3]
[4]
Cash generated through an IPO "can help with M&A or you can hire faster – we'll look at both of those areas," the FT quoted Haas as saying.
However, Arm had earlier been planning to lay off staff as a result of the planned public offering. The company was looking to lose about 1,000 staff worldwide – as detailed to employees [5]in an email from Haas himself – reportedly including cutting one in ten jobs in the UK side of the organization, equating to about 350 positions.
[6]
The news had led to Unite, one of the UK's largest unions, [7]calling on Arm's management to halt any such layoffs , saying that staff at the company are highly skilled technology workers and that the UK economy could not afford to lose those skills.
We asked Arm if the latest statement from Haas meant that the chip designer had reconsidered its plans to cull jobs, but the company has not yet responded.
Meanwhile, there has been controversy over where Arm will be listed following its IPO, with Masayoshi Son, chief executive of the chip designer's parent company SoftBank, indicating that the [8]Nasdaq stock exchange in New York is the favored location .
[9]Intel is running rings around AMD and Arm at the edge
[10]Arm most likely to list on the Nasdaq, says SoftBank CEO
[11]Inspur joins Arm gang with 2U box running Ampere silicon
[12]UK govt considers invoking national security in Arm IPO saga
"Most of Arm's clients are based in Silicon Valley and... stock markets in the US would love to have Arm," he told shareholders at the company's annual general meeting.
But the UK government has made it clear that it wants Arm to be listed on the London stock exchange, and recent reports claimed that it is considering the [13]threat of national security laws to force the issue with SoftBank.
[14]
This would mean applying the [15]National Security and Investment Act (NSIA), which came into force at the start of the year, in a bid to have SoftBank change its mind over listing Arm exclusively on the Nasdaq. The legislation gives UK ministers the power to halt mergers and acquisitions if it deems this necessary.
Critics, however, have pointed out that use of this legislation may not be appropriate in this case, and the UK government did nothing to stop the [16]sale of Arm to SoftBank back in 2016, which meant the company is already owned by a foreign entity.
SoftBank has previously stated that it aims to complete the Arm IPO within the current fiscal year ending March 31, 2023.
The company was said to be seeking to have the chip designer valued at up to $60 billion for the sale, but later reports suggested that SoftBank may aim to [17]keep a controlling stake in Arm as the company was unsure whether it would reach the full value if it divested itself completely of the Brit chip outfit in the current economic climate. ®
Get our [18]Tech Resources
[1] https://www.ft.com/content/2d565214-c1ba-4132-ac5e-3ddb74c9e4a0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2022/03/15/arm_job_cuts/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/03/21/uks_largest_union_to_arm/
[8] https://www.theregister.com/2022/06/24/arm_nasdaq/
[9] https://www.theregister.com/2022/06/27/intel_edge_amd_arm/
[10] https://www.theregister.com/2022/06/24/arm_nasdaq/
[11] https://www.theregister.com/2022/06/24/inspur_arm_2u_server/
[12] https://www.theregister.com/2022/06/22/uk_govt_arm_ipo/
[13] https://www.theregister.com/2022/06/22/uk_govt_arm_ipo/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YrsloMUl2lJWeASrlCQUoQAAANM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2021/11/17/uk_government_publishes_guidance_national/
[16] https://www.theregister.com/2016/07/18/softbank_to_buy_arm_holdings_say_reports/
[17] https://www.theregister.com/2022/04/22/softbank_arm_ipo/
[18] https://whitepapers.theregister.com/
Re: Road to hell
Charlie Clark
You mean they won't be put "saving kittens and dolphins" into the company's charter? I'm shocked, I tell you, shocked!
Re: Road to hell
sschuchart
Oh, come on now. Even for capitalists, quarterly-only thinking has been detrimental to the long term business profitability.
Re: Road to hell
Yet Another Anonymous coward
Softbank own ARM, Softbank sell ARM, Softbank gets money. Not clear how this enables ARM to suddenly grow and hire more
Anonymous Coward
The IPO is only there to make the Mr Haas richer and the other directors more money at the expense of staff who actually design cpu's which is way harder than anything the board does. Arm must be turning a profit so why no reinvest that to grow the company seems a better thing to do, but there I go again thinking logically rather than avarice
Charlie Clark
The IPO is there to generate cashflow for SoftBank. The board will say and do whatever is necessary for this to happen.
Last IT company that sold for the better?
badflorist
... can't think of one right now.
UNITE
VoiceOfTruth
-> The news had led to Unite, one of the UK's largest unions, calling on Arm's management to halt any such layoffs, saying that staff at the company are highly skilled technology workers and that the UK economy could not afford to lose those skills.
Very well. Why doesn't UNITE get off its heavy buttocks, form a high tech company with those workers? Maybe, like many union leaders and politicians, UNITE can talk the talk but can't actually walk itself.
I am not anti union.
Road to hell
Arm chief executive Rene Haas is looking to use funds generated by the expected IPO to expand the company, hiring more staff and potentially pursuing acquisitions.
Then the goal will be to satisfy shareholders, and that will lead to short term views and lay-offs as soon as profits are not high enough.