the ARM IPO next week

TSMC and ARM are the two most important chip companies from late last century (or 20-some-odd years ago, if we want less drama). TSMC allowed talented chip designers to break away from the lumbering integrated giants of the day–INTC or TXN, for instance–by offering them access to state-of-the-art manufacturing facilities. So they didn’t have to come up with billions of dollars to build their own fabs. ARM offered them standardized software tools for rent, so designers could concentrate on innovation rather than spend a ton of time creating their own hammers and saws.

Softbank, a Japanese investment company controlled by Masayoshi Son, which after a brilliant start has had a tough 21-century so far, owns ARM. It attempted to sell ARM to NVDA for $40 billion in 2020, but was shot down by anti-trust concerns. So it has decided on an IPO instead, with ARM making its stock market debut on September 13th.

I haven’t read the preliminary prospectus, which is available on the SEC’s Edgar site (ARM is going to be the ticker symbol). The offering price, just under a tenth of the company being sold, is being set as $47-$51 per share. This would value ARM as a whole at around $50 billion.

What I find interesting, and the reason I’m writing this, is that I’ve already gotten a blast email from Fidelity offering the possibility of getting an allocation of shares.

I don’t read this as a sign that demand is red-hot. It’s hard to know if the issue is the company/price or whether the apparent hodge-podge of US, UK and Japanese bankers is closer to the Mets/Yankees than the Braves/Orioles.

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