Arm’s CEO set for £30M bonus as the company prepares for a £50B valuation IPO on Nasdaq. Explore the decision, lead advisers, and tech market challenges in this update.
The CEO of Arm is poised to receive a substantial £30 million bonus as its parent company prepares to list it on the New York stock exchange with a projected valuation of £50 billion. Rene Haas, the Chief Executive, is anticipated to be granted a £15 million cash bonus in addition to a £15 million stock award once the initial public offering (IPO) concludes.
This development emerged alongside confirmation from Arm’s owner, the Japanese investment heavyweight SoftBank, that the renowned Cambridge-based company – recognized for its chip technology present in nearly all smartphones globally – will pursue listing on the Nasdaq next month, bypassing the London market.
A spokesperson for Arm remarked, “Approximately 70 percent of the global population is estimated to utilize products powered by Arm’s technology.” This announcement anticipates the largest stock market debut in the United States in almost two years.
The IPO’s roadshow, scheduled for early September, will be led by notable financial institutions including Goldman Sachs, Barclays, JP Morgan Chase, and Mizuho. An additional 24 banks will also participate as advisers, according to the spokesperson.
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Initial projections from SoftBank had indicated that Arm might amass £6 billion to £8 billion in fresh capital through the IPO. However, this figure may now be revised downward following SoftBank’s acquisition of the remaining 25 percent stake it didn’t directly own from its venture capital fund, Vision Fund.
The decision to opt for a New York listing has been perceived as a substantial setback for London, despite strong lobbying efforts to persuade SoftBank to choose the British capital. Arm had previously been dual-listed on the FTSE 100 and Nasdaq until SoftBank’s £24 billion acquisition in 2016.
Increasingly, tech entrepreneurs prefer US listings due to the potential for higher valuations. Susannah Streeter, the Head of Money and Markets at Hargreaves Lansdown, stated, “SoftBank’s choice to list Arm in New York underscores the disappointment of London’s exclusion, even though this decision was announced earlier in March. Arm’s success was often seen as emblematic of Britain’s achievements, but SoftBank appears to prioritize financial gains.”
As Arm readies itself for its public market return, it faces challenges as its yearly sales have slipped by 1 percent, partially due to weakened smartphone sales. Nevertheless, Arm has outperformed competitors by expanding into burgeoning sectors like cloud computing and artificial intelligence.
The company was established in 1990 in Cambridge by a group of 12 technology experts. It was subsequently listed on the London Stock Exchange and Nasdaq in 1998. In 2016, SoftBank acquired Arm for £24 billion, a deal that garnered approval from then-Prime Minister Theresa May and Chancellor Philip Hammond.
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