The ice-breaking IPO we’ve been waiting for may not come from the US after all

I’d give a LEG to see ARM break the IPO logjam

British semiconductor giant ARM returns to the public markets after more than five years of private life. In fact, the company’s note announcing that it was filing a private application to go public — a draft F-1 listing, in other words — said it might be listed in the United States.

Why would you get so worked up about it? Well, the news means ARM could be the groundbreaking domestic IPO we’ve been waiting for. The US technology IPO market is currently dead in the water and needs a champion to brave the unknown, and if ARM’s offering performs well it could encourage other companies to go public as well.

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We’ve covered this before, but just to refresh your memory, after a busy 2020 and 2021, US tech companies suddenly found themselves in 2022 in a changing market that generally favored lower valuations for public technology stocks. That resulted in a near complete halt to new IPOs in the US from both domestic technology companies and international companies.

This perceived lack of liquidity in the public markets is one of the reasons why the value of startup exits has plummeted in recent years. The lack of exits through IPOs, a historically critical way for founders, employees and investors to generate returns, meant that a large number of richly valued tech startups were caught between a declining, late-stage private capital market and an indifferent, if not downright hostile, environment. , public market.

ARM could change all that and do it in style. Recall that we expected ARM’s offering to raise as much as $8 billion through its offering. In terms of priming the pump, that’s a lot of primer.

What could ARM be worth in its list? Reuters cites some sources as expecting a valuation of more than $50 billion, or just over two OpenAIs.

If that sounds high, keep in mind that Nvidia canceled a $40 billion attempt to buy ARM last February. Sure, valuations were a little higher in early 2022 than they are now, but does anyone think semiconductor chips have become less important since then?

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