SoftBank Group CEO Masayoshi Son: ARM is likely to go public on the NASDAQ

On February 10, according to Reuters, SoftBank Group CEO Son Zhengyi said that ARM is likely to choose to list on the NASDAQ instead of the British mainland, which is bad news for the London Stock Exchange.

On February 8, Nvidia Inc. and SoftBank Group announced the termination of previously announced (acquisition) transactions due to significant regulatory challenges that hindered the completion of the transaction, and ARM planned an IPO rather than a sale.

Regarding the failure of the deal, SoftBank CEO Masayoshi Son said on Tuesday: "We are very happy to implement 'Plan B' (ARM listing). It will be a big IPO that will be one of the largest IPOs ever made in the semiconductor industry. ”

Now, he notes, "Regarding where ARM is listed, the U.S. is the market we're considering, most likely the NASDAQ." But wherever it is, the U.S. is where we're looking forward to arm listings. ”

Arm is headquartered in the UK and spun off in 1990 from an early computing company called Acorn Computers. Arm's energy-efficient chip architecture is currently used in about 95% of the world's smartphones. ARM employs around 6,000 people worldwide, of which around 3,000 are based in the UK.

In addition, ARM Group is the most valuable publicly traded technology company in London, and its design chip architecture is widely used in mobile phones and tablets of Samsung, Huawei, Apple and other manufacturers. In September 2016, SoftBank announced that it had completed a $32 billion acquisition of British chip design company ARM. It is reported that this is the largest M&A transaction conducted by SoftBank since the acquisition of US telecom operator Sprint, and it is also one of the largest M&A transactions in the global technology market that year.

Jay Ritter, an IPO expert at the University of Florida, said that despite the decline in global tech stock valuations, people still believe that U.S. private and public market investors know about tech companies and are willing to pay high prices. "The rationale for many tech companies listing on the NASDAQ is that U.S. investors understand the technology and are willing to pay higher prices for companies with compelling growth prospects."

Foreign media commented that in recent years, semiconductor stocks listed in the United States have been in a "big rise" state, represented by Nvidia, in terms of market capitalization, it has just surpassed Meta to become the seventh largest company in the United States.

It is worth mentioning that the rise in Nvidia's stock price has increased its cash and stock quotes for ARM from the initial $40 billion to a whopping $80 billion, with valuations far exceeding what it could possibly achieve in the open market.

Currently, the nasdaq exchange's most valuable tech companies include Apple, Microsoft, Amazon, and Alphabet, all of which have market capitalizations of more than $1 trillion. By comparison, none of the most valuable technology companies on the London Stock Exchange are valued at less than $50 billion.

Hussein Kanji, a venture capitalist at London-based venture capital firm Hoxton Ventures, said it would be "irrational" if SoftBank prioritized listing in the UK over the US. "There are no benefits to listing in the UK, but there are enough disadvantages, including a lack of research on the stock, and a lower valuation."

Another venture capitalist also said that if the exchange can provide long-term, technology-friendly investors, as well as analysts of public companies, it is in the best interests of the company and its shareholders.

None of this is available on the London Exchange.

Finally, analysts say ARM is often hailed as "the jewel in the crown of britain's tech industry." If ARM were to list on the NASDAQ, it would be a major blow to the London Stock Exchange.