FirstFT: UK chip designer Arm unveils US IPO plans

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SoftBank-owned chip designer Arm has started the countdown to the biggest US initial public offering in almost two years, unveiling a preliminary prospectus for a Nasdaq listing that is set to take place early next month.

Arm is on track to be the most valuable company to complete a US IPO since at least November 2021, when electric-car maker Rivian listed with an initial market capitalisation of $70bn.

SoftBank, led by Masayoshi Son, acquired UK-based Arm for $32bn in 2016. Monday’s filing confirmed that an internal transaction earlier this month between SoftBank Group and its Vision Fund — an investment vehicle that the Japanese conglomerate manages — valued Arm at $64bn.

The prospectus reveals that Arm depends on China for almost a quarter of its revenues, at a time when the Joe Biden administration is ratcheting up restrictions on US semiconductor companies’ activities there. Read more on the chip designer’s plans.

More IPOs: A Chinese billionaire who controls a key part of the battery supply chain is in talks to list some of his empire in South Korea, a step that could help the company work around US rules aimed at cutting reliance on China.

Here’s what else I’m keeping tabs on today:

Economic data: The CBI has its industrial trends survey for the UK, while Iceland releases its consumer price index for last month.
Xi in South Africa: China’s president begins a state visit ahead of this week’s Brics summit in Johannesburg, where he is expected to push the emerging-market bloc to become a geopolitical rival to the G7.
Meta: The Facebook owner plans to ask a Norwegian court to stop fines of $98,500 a day for privacy breaches identified by the country’s data regulator.

Five more top stories

1. FTSE 100 bosses were given a 16 per cent pay rise on average last year to reach a median pay of £3.91mn, or 118 times that of the median UK worker, further expanding the gap between executives and ordinary staff. Last year workers on average suffered a real-terms pay cut, with inflation outstripping wage rises. Read more from the High Pay Centre’s annual study.

2. Analyses of regulatory filings suggest much of the buzz around artificial intelligence in company earnings calls is just talk. While almost 40 per cent of S&P 500 companies have mentioned AI or related terms in earnings calls in the latest quarter, less than 16 per cent have done so in their corresponding regulatory filings, highlighting the challenge for investors of separating hype from real potential.

3. Donald Trump has said he will surrender to authorities in Georgia where he faces 13 charges including criminal conspiracy. The former US president said he would fly to Atlanta on Thursday, a day after other Republican presidential hopefuls are set to take the stage for a primetime debate in Milwaukee, Wisconsin. Here’s more on Trump’s legal troubles.

4. Bloomberg will have a new board chaired by former Bank of England governor Mark Carney, while chief product officer Vlad Kliatchko will take over as CEO. The announcement comes after growing speculation about succession at the media and financial services group, but its 81-year-old founder, Michael Bloomberg, has said he is “not going anywhere”. Here are the other management changes at Bloomberg.

5. The yield on 10-year US Treasury notes hit a 16-year high of 4.35 per cent yesterday, continuing a months-long sell-off in government debt. Investors are coming to grips with robust economic data over the summer, which has raised doubts that interest rates will go down any time soon. Read our full markets briefing.

The Big Read

With feelgood clichés such as “harmony between man and nature” and “benefits for all”, a speech by China’s leader at the UN in 2021 was widely ignored by international media. But Xi Jinping’s remarks have since taken on crucial significance through his Global Development Initiative, now gaining recognition as a foundation stone in China’s blueprint for an alternative world order.

We’re also reading . . .

Chart of the day

Rents in European cities such as London, Paris and Berlin are at their highest level on record. With rising mortgage costs forcing more middle-class buyers to stay in rented homes, tenants on lower incomes in sought-after locations are facing increasing pressure.

Take a break from the news

Our list of the best new books on economics includes a defence of free markets in The Capitalist Manifesto and John Coates’ The Problem of Twelve on the troubles that arise when a small number of actors gain influence over the politics and economy of a nation.