After Nvidia's $66 billion acquisition of Arm's "largest merger in semiconductor history" collapsed, SoftBank Group re-launched Arm's IPO, announcing that, in coordination with Arm, it will begin in the fiscal year ending March 31, 2023. Preparing for Arm's IPO.

Bloomberg reported a few days ago, citing people familiar with the matter, that SoftBank raised the valuation of Arm’s IPO to more than $50 billion and asked banks competing for Arm’s listing plan to underwrite about $8 billion in margin loans. SoftBank is picking a list of underwriters, with margin loan financing related to Arm's IPO as one of the options it considers.

SoftBank Chairman and President Masayoshi Son told investors and analysts last week that this (IPO) is a return to the original plan, targeting the largest IPO in semiconductor history. At the same time, London hopes that Arm will be listed in the UK on the grounds that the company can obtain a higher valuation, but according to people familiar with the matter, Sun Zhengyi will still choose to list in the United States, because he believes that this will get the highest valuation.

Previously, Arm could be valued at between $25 billion and $35 billion, based on industry valuation metrics and early analyst forecasts. According to Bloomberg, Arm’s revenue for the past 12 months was about $2.6 billion. If investors valued the company based on the Philadelphia Stock Exchange Semiconductor Index's average market capitalization-to-income ratio, the company would be worth about $24 billion. If you factor in Arm's growing importance in areas such as cloud computing and automotive, its valuation could be above average. In addition, most of Arm's revenue comes from lucrative royalties. If the price to sales ratio reaches 10-12 times, then Arm's valuation will be between 26 billion and 31 billion US dollars.

Some analysts also believe that Arm has been losing money in the past few years, and it is difficult to give these assets a reasonable valuation under the current market situation.

Bloomberg pointed out that SoftBank's requirement for margin loans will test the banks' appetite for riskier forms of financing after some high-profile crises in recent years. In December, the Fed told banks that they must maintain adequate margins and be aware of their positions when dealing with investment funds.

As we all know, technology stocks have plummeted around the world in recent years. Under the influence of multiple factors such as concerns about rising interest rates and geopolitics, investors are no longer enthusiastic about new stocks, and the IPO market is cold, but at the same time, it has also made underwriting tasks like Arm. , especially sought after by investment banks in the highly competitive IPO advisory services market.