Previewing Arm’s F-1 8/21/23

TechCheck

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Disruptors, Cnbc, Investing, Tech, Management, Business, Technology, Faang

4.5 • 66 Ratings

🗓️ 21 August 2023

⏱️ 7 minutes

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Summary

Softbank’s chip designer Arm is expected to file its F-1 for IPO today, revealing key finances and operations. But whether investors will buy its $64 billion pre-IPO valuation hinges on the filing showing that chip designer is truly at the center of the AI boom, as Softbank founder Masa Son claims, and not actually more like AI-adjacent. The listing would be the biggest in the U.S. in almost two years, and could jump start the IPO market.

Transcript

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0:00.0	Soft Banks Arm reportedly expected to file a key document today that would lay out its
0:05.8	finances and operations as the chip designer prepares to go public.
0:09.7	Idr Durbosa takes us through what to expect in today's Tech Check D between Arm and Instacart.
0:14.8	It is getting interesting, we hope.
0:18.2	We hope the market conditions last.
0:19.6	So one key question though that this arm filing is going to have to answer is this a company that is AI-centric or just AI adjacent
0:27.5	Much will rest on the answer like how investors ultimately value the company and implications for others looking to test the IPO water such as
0:35.3	Instacart which could reportedly file as early as this week.
0:38.8	Now the conditions for an IPO at the moment, a little mix, certainly though better than they have been in 18 months.
0:44.6	Tech, especially Mega Cap, has made a massive comeback this year underpinned by the promise of
0:48.8	generative AI.
0:49.8	Chips in particular seen as the picks and shovels of the boom.
0:53.0	But over the last few weeks some of the air has come out of the tech rally and
0:56.5	Arm is not in video. Its main business is smartphones and it reportedly saw revenue decline in its
1:02.1	latest fiscal year.
1:03.6	It is, however, developing technology for AI applications.
1:06.6	It's working closely with AI companies.
1:09.1	But we're really at this show me moment.
1:11.2	And investors, they want to see revenue derived from AI not just
1:14.6	be told that it's on the way so we'll see if Arm does that. Soft Bank which
1:18.3	bought arm for 31 billion dollars back in 2016 it really needs a successful listing here and especially a liquidity
1:25.0	event to go out and support Massasan's bull defensive strategy.
	...

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