Arm swans off to Nasdaq despite UK gov pleas to IPO in London
- Reference: 1677848176
- News link: https://www.theregister.co.uk/2023/03/03/arm_nasdaq_listing/
- Source link:
In a statement, the Brit chip design company said it intends to keep its headquarters in Cambridge, UK, as well as Arm's "material IP," and that it has plans to open a new site in Bristol.
Arm chief executive Rene Haas said in a statement: "After engagement with the British government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders."
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He added that Arm would "consider a subsequent listing in due course".
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The development, however, is seen as another blow for the FTSE 100 shares index, as London has already lost its crown as the top European trading center after the UK left the EU.
The move follows months of speculation about whether Arm, which is owned by Japanese investment outfit SoftBank, would list on both New York's Nasdaq and the London Stock Exchange, although there was never any doubt that if it came down to a choice between the two it would be New York; SoftBank stated in June last year that it [4]intended to list Arm on the Nasdaq .
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It was reported in January that Prime Minister Rishi Sunak had hosted Haas at Downing Street in a [6]bid to have Arm listed in London . The meeting was also joined remotely by Masayoshi Son, founder and CEO of SoftBank.
It was even rumored at one point that the UK government was considering [7]invoking the National Security and Investment Act (NSIA), which gives ministers the power to intervene in mergers and acquisitions on the grounds of national interest, although there is no evidence this was given serious consideration and Arm is already owned by a foreign organization.
Russ Shaw, founder of Tech London Advocates, said the decision is a significant blow to the UK tech sector, as well as disappointing news for the London Stock Exchange.
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"Arm has been an important global leader in the semiconductor space and an exemplar British technology and chip design company," he stated.
Shaw said this was a direct consequence of the UK government's shortsighted decision to allow [9]Arm to be sold to a foreign buyer in the first place, which he reckoned would not have happened elsewhere.
[10]Arm co-founder: Britain's chip strat 'couldn't be any worse'
[11]Arm has legs: VMware's Bitnami starts packaging apps for Graviton and Ampere
[12]Microsoft makes Windows-on-Arm in VMs on Macs official – with Parallels for starters
[13]Taking notes from AWS, Google prepares custom Arm server chips of its own
"Arm's journey to the Nasdaq was somewhat sealed when it was allowed to be sold to an overseas acquirer back in 2016. Nations like the US and China that recognise the strategic value of chip companies would not have allowed such a decision to be made, and the UK must now endeavour to proactively protect its semiconductor industry."
Although Arm is keeping its headquarters in the UK – for now, at least – the decision not to list in London "demonstrates a lack of faith in the UK," Shaw said, and "adds urgency to the need for the UK government to publish its long-awaited semiconductor strategy."
However, Gartner vice president for semiconductors and electronics Richard Gordon disagreed that Arm's move was all about the lack of a government strategy.
"I don't think this has much to do with the UK's lack of a 'coherent technology strategy,' which is a given," he told us. "More likely it's to do with financial market considerations."
It has previously been stated that Arm will have better access to finance in the US stock markets, and Gordon pointed out that most of Arm’s major licensees are also based on the US.
The decision to float Arm on the stock exchange as a publicly listed company comes after an earlier attempt by SoftBank to sell the chip designer to Nvidia [14]fell through at the start of 2022.
The repercussions from that failure were that Arm decided it needed to embark on a round of cost cutting ahead of the IPO, and this saw it lay off [15]20 percent of the UK workforce last year, which should be considered when Haas points to the company's "continued headcount growth" in his statement.
SoftBank was said to be seeking an estimated $66 billion from the sale of Arm to Nvidia, and current valuations for the IPO are varying between $30 billion and $70 billion, according to Bloomberg. The wide range reflects the challenges of valuing the company against the current volatile state of the semiconductor industry, it said. ®
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[4] https://www.theregister.com/2022/06/24/arm_nasdaq/
[5] 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=44ZAIntv9ad35wozuCpLKU6gAAAMo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/01/09/uk_gov_arm_ipo/
[7] https://www.theregister.com/2022/06/22/uk_govt_arm_ipo/
[8] 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=33ZAIntv9ad35wozuCpLKU6gAAAMo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2016/07/18/softbank_to_buy_arm/
[10] https://www.theregister.com/2023/03/02/uk_govt_criticized_arm_founder/
[11] https://www.theregister.com/2023/02/27/bitnami_arm_support/
[12] https://www.theregister.com/2023/02/17/windows_11_arm_vms_authorised/
[13] https://www.theregister.com/2023/02/14/google_prepares_its_own_custom/
[14] https://www.theregister.com/2022/02/08/arm_cancels_sale_to_nvidia/
[15] https://www.theregister.com/2022/10/05/arm_job_cuts_hit_uk/
[16] https://whitepapers.theregister.com/
Re: I hear a rumour
Maybe it was just a rumour.
Are any of us really surprised?
The decision to flog off yet another UK business years ago is pretty much indicative of the UK government mind-set on anything technological. Or perhaps more accurately, a lack of any sort of functioning mind when it comes down to science and technology. The results are all rather predictable.
These are different circumstances to the flog offs. Arm was never state owned.
The government doesn't really care two hoots about who owns Arm. It has not talked about the technology. It has instead talked a lot about listing Arm in London so the money manipulators can get their unfair share of the loot, the sort of people who mis-sell products, manipulate bank interest rates to suit themselves, who act on insider information.
The Tories don’t really care two hoots about who owns industry in Britain, the conservatives are only really interested in property, construction and financial services.
"consider a subsequent listing in due course"
Sounds like : "When the UK is relevant once again"
But hey, you took back control ! Whoop !
FB
The former leader of the current ruling party said "F Business"
and the party to this day follows this mantra.
So why would any company treat this country seriously?
Reasons?
According to some reports, one of the reasons for not wanting to list in London is that the LSE has stricter rules on reporting 'related party transactions'. If listed in London ARM would have to report on any transactions it had with Softbank or other companies in which Softbank has a stake. I don't know if not wanting to report such transactions is just good business sense or because Softbank is planning to things with ARM that it would rather not make public.
Re: Reasons?
Name other tech giants listed on the London Stock Exchange instead of the tech targeted NASDAQ ?
Re: Reasons?
Well there was a company called Autonomy that was part of the FT100…
and wasn’t ICL :) listed in London…
Re: ICL
Or Fujitsu as we now call it.
Re: Reasons?
@Roland6
You used past tense for both of those. Which is rather revealing about tech companies in the Uk...
Re: Reasons?
@Roland6
It was before it went private.
Chasing pies in the sky
Another thing is, why government is not creating a good environment for business to grow so that we could build something better than ARM rather than clinging to the past?
Currently there is absolutely no way this country can attract any talent with its punitive taxes, poor services, crime and skyrocketing costs of living.
Great idea here...
Maybe the UK should leave the EU so that it can get even fewer- sorry, my mistake, meant "more"- companies like ARM to list their shares in London and get on with the race-to-the-bottom, low-rent, low-tax, low-protection "Singapore Upon Thames" business environment people like you to propose.
Oh, and I'm thinking of, I dunno, that Kwasi Kwarteng and Liz Truss as the people who'd be best placed to implement your tax-cutting policies and definitely wouldn't foul it up so that they stymied growth and investment far more than any risibly fictitious "anti-growth coalition" could.
One could become PM and the other the chancellor. Which one do you think should get the top job?
Re: Great idea here...
None of these "Singapore Upon Thames" enthusiasts seem to have the slightest idea about Singapore
Re: Singapore
I did a stop-over in Singapore some 20-odd years ago. Then, there were SG$3.30 to the pound. Now it's about half that, SG$1.62 last time I looked. I think that tells us something about the competence of the UK's political classes.
Re: Great idea here...
I'm thinking of, I dunno, that Kwasi Kwarteng and Liz Truss as the people who'd be best placed to implement your tax-cutting policies and definitely wouldn't foul it up so that they stymied growth and investment far more than any risibly fictitious "anti-growth coalition" could.
The measures Liz Truss wanted to introduce would affect SMEs the most and big business is against that. Big corporations can easily avoid paying taxes while SMEs can't.
Healthy and growing SMEs is a danger to the status quo and big corporations don't want risks involved in that.
Furthermore, good business environment means the talent that has no alternative to working in a big corporation, could start their own enterprise and that's another problem big corporations don't want to have.
Lastly the reversal of IR35 changes could give the power back to the talented engineers hands. Imagine workers quitting and starting their own businesses.
Seems like you are a believer of late stage capitalism.
Re: Chasing pies in the sky
So you want to improve services and lower taxes?
Re: Chasing pies in the sky
There is a large scale corruption taking place that is not being addressed. Departments that are supposed to fight it are doing nothing.
In essence a huge proportion of tax payer money is being wasted. That's one thing.
Another thing, the tax system needs to be rebalanced. It is wrong that engineer can pay over 50% of tax on their income, while CEO pay 10% at most if they have bad accountants.
Same goes regarding inverted progression when it comes to business. Small business pays the most tax % wise while big corporations pay the least.
Not sure why people on here want big corporations to continue to avoid paying taxes and individual success to be punished?
Envy?
Re: Chasing pies in the sky
@John H Woods
"So you want to improve services and lower taxes?"
That should surely be the aim? Good business is producing more and costing less, yet government doesnt seem to have the same motivation. The idea that the gov should take more and do more until it eats us all alive is insane.
Re: Chasing pies in the sky
> punitive taxes
Nice sound it’s that doesn’t stand up to scrutiny.
But be my guest if you want to take a pay cut and emigrate to India or China…
Yet another example of a Conservative government failing to protect businesses or the best interests of the country. Reuters, Rover, Lyons, British Steel, Rowntree, Apricot, Cadbury, ARM… Cornerstones of British Industry, and now all gone. Even the city of London, and much of our countries land, sold to Russians, Arabs - and anyone else with deep pockets. I’d say the NHS is next, but they’re already more than halfway through destroying that.
Pleas are irrelevant. ARM shouldn’t have been sold to foreign interests in the first place. Can you imagine France or Germany allowing such a thing to happen?
If there’s one thing you can guarantee though, some Conservative politician or vested interest has made a nice fat short term profit - and to hell with the future.
I wish sanity prevailed in the Conservative Party. I don’t mind a political party whose views I disagree with as long as they are genuinely held and believed to be in the best interests of the country. This mob though are just a bunch of chancers and shysters - much like the current iteration of the Republican Party in America.
You’d have to be an utter mug to vote for them. Grr.
You make a very good overall point with your list of companies. Rover was interesting. I can't remember which Tory MP it was who talked about "success" when four people enriched themselves while Rover went bust. You can read more about it here: https://www.theguardian.com/business/2009/sep/11/mg-rover-phoenix-four1.
The Tories are not the party that it was even 30 years ago. It is in the hands of very very wealthy people who seek to enrich themselves even further. 30 or 40 years ago, particularly in the 1970s and early 1980s, it might have been seen as the party for people who aspired to better things by dint of their own effort. Now it's just a party for the rich and bugger off any one else.
Labour are not any better.
To be fair, Rover was a money pit. It only survived as long as it did because of hand out after hand out They were badly but rust buckets from the 70s onwards, badly thrown together and with only a slight afterthought of quality.
They got their asses kicked by the Japanese (as did many UK automotive industries) because they make reliable well built cars.
I actually liked and had a few Rovers, and because of that, I became a dab hand at replacing body parts, treating and filling rust holes and high quality respraying, hell I even became good friends with girl in the parts department.
The link, interesting enough despite it being the wretched Guardian --- woke but not socialist --- has a redundant 1 at the end leading to a 404; it is:
https://www.theguardian.com/business/2009/sep/11/mg-rover-phoenix-four
Thank you for the correction. I agree the Grauniad is pretty wretched. The story was among the first few links I found for Rover + Phoenix.
You missed Westland Helicopters…
"Can you imagine France or Germany allowing such a thing to happen?"
https://en.m.wikipedia.org/wiki/Deezer
Correction needed in article.
"adds urgency to the need for the UK government to publish its long-awaited semiconductor strategy.""
It should read
"adds urgency to the need for the UK government to publish its long-awaited Brexit strategy."
Re: Correction needed in article.
Should read "adds need for UK government to publish any strategy"
Although I do worry about that saying that the most dreaded sentence in the English language is "I'm from the government and I'm here to help.".
I hear a rumour
that Softbank asked Nissan how much UK government promises (the ones given in shady backroom meetings) were worth.
They didn't get an answer, but then saw how the NI protocol managed to be a lie to parliament.
That pretty much settled it.
You probably won't hear this, as the media will be busy with some royal nonsense.