Arm Still Trying to Punch Above Its Weight

livemint.com:

Arm has long had an outsize reach in the chip industry. Still, a $50 billion market valuation is ambitious even in a market starved for major new tech listings. The British chip designer proposed pricing terms Tuesday morning for its planned initial public offering.

That listing looks likely to take place soon: The company said it has already launched its roadshow to support the deal. Arm is currently planning to list its shares in the range of $47 to $51 a piece, and they will trade on the Nasdaq exchange following the listing. The midpoint of that price range would value Arm around $50 billion, placing the company in the middle of the pack of the PHLX Semiconductor Index in terms of market value.

That might seem reasonable—especially considering the $64 billion value that Arm owner SoftBank reportedly arrived at last month when it bought a 25% stake in Arm from its Vision Fund unit. But Arm, which generated revenue of just under $2.7 billion for the trailing 12-month period ended June, also would rank among the smallest companies on the index on that measure. So that seemingly middling market value gives Arm a premium over chip companies such as Marvell, GlobalFoundries and OnSemi that are generating much more revenue while also exposed to the industry’s hottest trends such as artificial intelligence, trailing-edge manufacturing and electric vehicles.