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SoftBank under pressure to dual list Arm in London and New York

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SoftBank Group Chairman, CEO Masayoshi Són at a Tokyo Press Conference on November 6, 2019, in Tokyo.

Tomohiro Ohsumi | Getty Images

The pressure is growing SoftBankArm is now dual-listed U.K. chip developer Arm after the agreement with NvidiaIt is Off.

Arm is considered the jewel of the U.K.’s tech sector and British investors want it listed.

CNBC’s Julian Rowe told CNBC that Latitude is a general partner in tech investment company Latitude. Rowe said the U.K. should do all it could to prevent successful UK tech firms like Arm being sold prematurely and cheaply to overseas buyers or take their valuable listings offshore.

Rowe stated that while history will show that NYSE or Nasdaq might seem like a better home for a chip design such as Arm, it underestimates how much Arm is arguably Britain’s least-known success story and what special place it could occupy by listing in London. The company has the potential to be a leading player in U.K. tech’s high-growth sector.

Arm is an example of a U.K. technology success story. London would be a perfect home when it goes public.

Laura Citron

CEO of London & Partners

Laura Citron, CEO of London & Partners, London’s business growth agency, told CNBC that the U.K. capital is the perfect place for Arm to go public. According to her, London has Europe’s biggest technology hub and is also a financial centre. It is a great place to launch a tech company.

Citron said: “Arm, a U.K. technology success story is London. London would make it a great home when it becomes a publicly traded company.”

SoftBank had planned to sell Arm and Nvidia to Nvidia at $40 billion, but it was stopped by the deal collapsedSoftBank has decided that it will not launch an Arm IPO because of growing regulatory scrutiny earlier this month.

SoftBank CEO Masayoshi son told investors during an earnings call that Arm would be IPO’d likely take place on New York’s Nasdaq stock exchangeThe London Stock Exchange has lost its tech ambitions.

Son explained that “The U.S….that’s the market we are considering when it comes down to listing Arm” and that most likely Nasdaq is also being considered. But, regardless of where it may be, we are looking at the U.S. market for Arm’s listing.

Jamie Urquhart, cofounder of Arm, told CNBC via email that SoftBank’s decisions will be based on their needs and not Arm’s.

“The Arm team leading the company will also have some bargaining power since they will be important in terms of a listing – they will have to sell it,” Urquhart added.

According to Alex Lim (managing partner of Blossom Capital in London), if Arm is listed in New York, rather than London, this will result in a loss for the U.K.’s technology sector.

He said, “By listing the company here, Softbank or Arm would endorse the U.K.’s potential future to create great companies. That signal would also be powerful for those who invest in new tech and are starting businesses here.”

QualcommCNBC’s Chief Financial Officer Akash Pakhiwala said Monday that Arm was a highly valuable technology company that will succeed wherever it lists.

He added, “They have choices and they are all good options to me.” Investors will find them. This technology is a valuable asset and a very important one for the industry. This technology is becoming increasingly important as phones chips integrate into other devices.

Cambridge tech darling

Arm headquarters are located in Cambridge in England. The company was created in 1990 from an Acorn Computers early computing firm. Its highly efficient chip architectures, which are energy-efficient, have been used in approximately 95% of all smartphones worldwide. Arm employs approximately 6,000 people worldwide and has 3,000 employees in the U.K.

The company was listed in both New York and London until 2016 when it was bought by SoftBank for $32 Billion.

Urquhart stated that Arm was listed in 1998 and requested a dual listing. Urquhart also said that its sponsors advised the company to do so. The U.S. may have a better understanding of the importance of technology companies. However, having Arm’s home listing could mitigate any risk that Arm becomes an American orphan. exchange.”

New York: Friday, January 28th, 2022.

Bloomberg | Bloomberg | Getty Images

Although the acquisition of Arm by SoftBank was hailed as a huge success in the U.K., it is now reluctant to let the company acquire the semiconductor company from an outsider. All countries around the world are now questioning where and how chips are manufactured due to the ongoing chip shortage.

UK wants the best technology companies in the country to list here so they can help the economy and boost the stock market. Many have tried to get higher valuations by going public in New York over the years.

Here are some of the top tech companies that trade on Nasdaq Apple, Microsoft, Amazon AlphabetEach of them have a total market capitalization exceeding $1 trillion. The London Stock Exchange’s most valued tech companies are worth less than $50 Billion.

CNBC was told by Hussein Kanji (a London-based venture capitalist) that SoftBank should not give preference to a U.K. listing. According to him, there are no benefits from listing in the U.K., but enough downside, due to low valuations, lack of research and poor press coverage. You need both upside and disadvantage to persuade people to move.

There were a few household U.K start-ups that listed on the London Stock Exchange last year but they didn’t all make it to the IPOs.

Delivery of food available DeliverooThe share price of the company, for instance, plummeted almost instantly upon going public. Cybersecurity firm DarktraceFintech company also experienced a rough ride. WiseIs valued much lower than those of its U.S. competitors.

CNBC’s Harry Briggs told CNBC that while London’s listings have been disappointing, Arm has a history of being listed in London and there is an appetite to buy a piece of Omers Ventures Europe.

SoftBank spokeswoman told CNBC that no final decision has been reached on Arm’s destination for listing. London Stock Exchange refused to comment.

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