British chip designer Arm is targeting a valuation of around $52 billion for its IPO, according to a filing on Tuesday.
Arm Holdings is set for a blockbuster initial public offering which will test market appetite for an important technology company. However, its targeted valuation suggests it is accepting it won’t be the next Nvidia.
The target is below a $64 billion calculation of Arm’s value following a recent stake sale involving its current owner SoftBank . SoftBank is hoping to sell about 10% of total shares outstanding in the offering, The Journal reported. The company will issue 95.5 million American depositary shares from $47 to $51 each, with each ADS representing one ordinary share. With 1.03 billion ordinary shares to be outstanding after the IPO, the company would be valued between $48.23 billion and $52.33 billion.
read this That’s less than the 117 times trailing price-to-earnings ratio which Nvidia trades. However, Arm is still aiming for a hefty premium to other chip makers which share a heavy exposure to the sluggish smartphone market. For example, Qualcomm trades at a trailing P/E ratio of 15 times.
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