Sharecast News) - UK technology firm Arm has snubbed the London Stock Exchange and decided to list its shares on the US stock market.
Cambridge-based Arm, owned by Japanese investment firm SoftBank, made the decision despite continuous lobbying by successive UK prime ministers, senior ministers and officials.
âAfter engagement with the British government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders,â the company said on Friday.
SoftBank last year decided it would seek to re-list the business - the worldâs biggest supplier of chip design elements used in products from smartphones to games consoles - on the stock market after a $40bn (ÂŁ33.4bn) takeover by US firm Nvidia was blocked over competition concerns.
The move is the latest blow to London, where Arm was listed until it was snapped up by SoftBank for ÂŁ24.6bn in 2016.
It also comes a day after building materials giant CRH revealed it is planning to shift its main stock market listing from London to New York.
CRH, which is headquartered in Dublin and valued at more than ÂŁ30bn, said: âWe have now come to the conclusion that a US primary listing would bring increased commercial, operational and acquisition opportunities for CRH.â
âWhile the FTSE 100 enjoyed relative resilience last year partly because of its lack of technology giants, allowing it to avoid the âtech-wreckâ, this has also long been a criticism of the UK blue chip index which has struggled to attract key behemoths in the sector,â said Interactive Investor analyst Victoria Scholar.
âThere have also been some high-profile disasters in UK tech with Deliverooâs IPO flop and THGâs share price slide. Armâs abandonment of London is another kick in the teeth for the Square Mileâs attractiveness among international investors as a go-to destination for technology giants.â
Would be interesting to know why a UK listing was snubbed, but might simply be because US listed companies tend to generate a higher premium when you compare similar company metrics to listings elsewhere.
That said, I think the UK should dump stamp duty and help encourage technology firms to list. A secondary listing at least on the LSE would be nice for extended trading.
My point is that, we cant all list in the US - otherwise whatâs the point of other exchanges then. We might as well have 1 global exchange and be done with it.
24/7 always on trading. This will come some day. How cool would that be - its a market holiday in your country, so you trade the same security on a different exchange?
Softbank wants one thing, and one thing only. To get a crazy over priced valuation.
What they are essentially saying is we want to list a stock over priced where people are prepared to pay anything to buy the stock.
So yea, go ahead list in the US and watch retail investors get burned.
Investing in ARM is a great idea if its fair value or below fair value. If it was listed on LSE all that would happen is it would lose value faster, whilst in US it will also be priced at fair value just it may maintain on over valuation for longer.
Why on earth anyone would want to invest in ARM when really its just a Softcat money spinner is beyond me, good milk the US for $ and use the proceeds back in the real UK economy. Thanks.
Do you remember what happened with Facebook when it finally listed? Not saying we will see the same, but at the moment we dont have the underlying metrics to correctly value the company. Too much forward pricing will likely be priced in, in favour of SoftBank.
Theyâre also talking about floating a what 40bn company? It would be bought up quickly by all the Nasdaq 100 trackersâŚ
