From the Beginning, Arm IPO Was Plan A

By Sally Ward-Foxton, EETimes (February 15, 2022)

After SoftBank’s deal to sell Arm to Nvidia collapsed last week, the Japanese conglomerate was seemingly forced to resort to Plan B: relisting Arm as a public company. According to SoftBank CEO Masayoshi Son, however, an IPO was its Plan A all along.

Having previously argued to regulators that an IPO would be a disaster, Arm and SoftBank are now faced with convincing investors that an IPO is, in fact, a good idea. The companies are floating arguments that a public Arm will thrive in new markets that include data centers and automotive.

In documents submitted to U.K. regulators in December 2021, you’ll recall, Arm detailed the potential pitfalls of an IPO. Its arguments against an IPO revolved around a publicly-traded Arm lacking the financial resources to take on powerful incumbents in the data center market. Moreover, impatient capital markets would demand a focus on short-term revenue growth and profitability. That would necessitate slashing costs to maximize value, inhibiting Arm’s ability to invest, expand and innovate.

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