|

SoftBank’s Arm is Set to List on the Nasdaq Later this Year

(Photo Credit: Miki Yoshihito/Unsplash)
(Photo Credit: Miki Yoshihito/Unsplash)

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

Two years after setting a record for IPOs, American stock exchanges have been putting up mostly zeros in 2023, but a blockbuster initial public offering may be on the horizon.

Japanese investment manager SoftBank plans to list chipmaker Arm on the Nasdaq in the coming months, setting the stage for the largest IPO this year in what has been an eerily quiet new issuance market.

Call it a Comeback

IPOs were all the rage back in 2021, when about 900 new US listings raised just over $280 billion, according to S&P Global. But the next year, they slowed to a crawl when 150 listings raised just $21 billion. And today, IPOs are down 22% year-over-year, having raised only $2.35 billion in 2023, Reuters reported.

Softbank was lined up to sell Arm to leading computer tech giant NVIDIA for $40 billion, but the deal was scrapped after facing too many obstacles from US and European antitrust regulators. Some Wall Street experts predict IPOs will return to former glory, and Arm just might be the catalyst:

  • Softbank still hasn’t released any official numbers or when exactly Arm will debut on the Nasdaq, but sources told Reuters that the company is looking to raise between $8 billion and $10 billion.
  • Another big IPO in the works is Johnson & Johnson’s Kenvue – the consumer health line that includes popular brands like Tyelonol, Listerine, and Zyrtec. The IPO is set to debut on the New York Stock Exchange soon with the hopes of raising roughly $3.5 billion.

Another Shot: Arm has a collection of legacy firms leading its journey to market including JPMorgan, Barclays, Mizuho, and of course, Goldman Sachs. While the David Solomon-led investment bank was head manager for some of the biggest IPOs during the 2021 boom, it was also the one of the lead underwriters for SoftBank’s biggest disappointment: the Vision Fund, an investment vehicle that consistently lost billions on failed startups. Obviously absent from the list of Arm creditors is Morgan Stanley. SoftBank CEO Masayoshi Son continues to be a fan of second chances instead of finding someone new.