Arm Company make a dangerous move
Arm, a leading microchip designer based in Cambridge, UK, has announced that it will pursue a sole US listing on the Nasdaq instead of listing on the London Stock Exchange this year.
Arm, the British microchip designer responsible for creating the technology that powers devices ranging from smartphones to game consoles, has announced that it will not pursue a listing on the London Stock Exchange this year. Despite reports in January suggesting that talks had been restarted between Arm’s owner, Japanese investment firm SoftBank, and UK Prime Minister Rishi Sunak regarding a possible UK listing, the Cambridge-based firm has opted for a sole US listing in 2023 as “the best path forward”.
Arm has announced that it will not pursue a London stock exchange listing this year. Despite reports in January of talks between British Prime Minister Rishi Sunak and Arm’s owner, SoftBank, the company has decided that a sole US listing in 2023 is the best option. Arm CEO Rene Haas stated that the company will consider a UK listing in the future. The decision has raised concerns over the UK market’s ability to attract tech company stock offerings, with US exchanges perceived as offering higher profiles and valuations. Listing on a stock exchange enables a company to go public, allowing investors to buy and sell shares of the company’s stock on specific exchanges.
Cambridge-based microchip designer, has announced that it will not pursue a listing on the London Stock Exchange this year. The company, owned by Japanese investment giant SoftBank, has decided that a US-only listing on the Nasdaq in 2023 is the best way forward. The decision has raised concerns about the UK’s ability to attract tech company stock offerings, with US exchanges seen to offer higher profiles and valuations. Arm will keep its material intellectual property, headquarters and operations in the UK and will continue to invest in the British tech ecosystem, according to CEO Rene Haas.
A spokesperson for the UK government commented on the news, stating that the country is pushing forward with ambitious reforms to its capital market regulations to build on its success as Europe’s top hub for investment and the world’s second-largest. The spokesperson also mentioned that the UK continues to attract some of the largest and most innovative companies globally, and commended Arm for its commitment to increasing its UK presence and investing in more jobs.
The UK-based microchip designer, is considered as one of the UK’s top technology companies. Founded in Cambridge in 1990, its chip design technologies are used by major manufacturers such as Apple, Samsung and the Taiwan Semiconductor Manufacturing Company to build their processors. In its latest quarterly filing, the company reported revenue up 28% from the same period last year and has shipped more than 250 billion Arm-based chips to date. Last year, SoftBank’s efforts to sell Arm to graphics card maker Nvidia were halted as competition regulators in the UK, US and Europe investigated whether the deal would result in higher chip prices and less competition.
Tech London Advocates and Global Tech Advocates founder, Russ Shaw CBE, said that while Arm’s statement showed some hope for their commitment to their British roots, the decision by Arm and SoftBank to pursue a US-only listing is a significant setback for the UK tech industry. Shaw added that it is also disappointing news for the London Stock Exchange and the heritage and future of the UK semiconductor industry. UK tech leaders, including Shaw, have urged the government to publish its semiconductor strategy to support British companies operating in the chip industry and supply chain.
Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates, expressed disappointment over Arm’s decision to opt for a US-only listing and called for the UK government to publish its semiconductor strategy to support British companies in the industry. He criticized the UK’s handling of the situation, citing the sale of Arm to SoftBank in 2016 as a factor leading to the US-only listing. He added that nations such as the US and China would not have allowed such a decision to be made and called for the UK to take proactive steps to protect its semiconductor industry.
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