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SoftBank-backed Arm reveals revenue decline in US IPO filing

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SoftBank-backed Arm reveals revenue decline in US IPO filing

FILE PHOTO-The Arm Ltd logo and a U.S. flag are seen in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

Aug 21 (Reuters) – SoftBank Group Corp’s (9984.T) Arm Holdings Ltd reported a 1% fall in annual revenue due to a slowdown in smartphone sales, after the chip designer disclosed the paperwork for an initial public offering that is expected to be the largest of the year.

Arm’s stock market launch is expected to bring back to life a lackluster IPO market, which has over the last year seen several high-profile startups postpone their listing plans due to market volatility.

For the year ended March 31, Arm’s sales declined to $2.68 billion, hurt mainly by a slump in global smartphone shipments. Sales for the quarter ended June 30 fell 2.5% to $675 million.

Arm said that more than 50% of its royalty revenue for the most recent fiscal year came from smartphones and consumer electronics. The global smartphone market is on track to hit a decade low this year, according to Counterpoint Research. Arm’s modest decline in revenue, despite heavy reliance on smartphones for royalties, suggests that its per-chip rates have increased.

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The company, whose chip technology powers most smartphones including iPhones, did not reveal the number of shares it is planning to sell and the valuation it will seek. Reuters has previously reported that SoftBank plans to sell about 10% of Arm’s shares in the IPO and seek a valuation of between $60 billion and $70 billion for the chip designer.

Arm was earlier planning to raise between $8 billion to $10 billion from the IPO, but is now expected to raise less capital, after SoftBank bought the 25% stake in Arm it did not directly own from its Saudi-backed Vision Fund, Reuters first reported earlier in August. SoftBank confirmed the deal with the Vision Fund in its filing on Monday.

SECOND CRACK AT IPO

Founded in 1990, Arm was launched as a joint venture between Acorn Computers, Apple Inc (AAPL.O) (when it was known as Apple Computer), and VLSI Technology. The company was publicly listed on the London Stock Exchange and the Nasdaq from 1998 until 2016 when SoftBank took Arm private for $32 billion.

SoftBank began preparations for an IPO of Arm after a deal to sell the company to Nvidia Corp (NVDA.O) for $40 billion collapsed last year over objections from U.S. and European antitrust regulators.

Arm makes money from upfront licensing fees for technology and then a royalty paid on each chip sold by Arm’s customers. The company has been expanding those royalty revenues, saying that the newest version of its technology has the “potential to drive our royalty opportunity per device even higher,” according to its filing.

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Arm said 24% of its revenue came from China in its most recent fiscal year. That is broadly in line with many other companies in the semiconductor industry, but Arm’s revenue all comes through Arm China, a separate company in which it has only an indirect 4.8% stake.

“The fact that Arm China operates independently of us exposes us to significant risks. Arm China’s value to us as a customer is dependent on Arm China’s business results, which are, in turn, subject to substantial risks that are outside of our control,” Arm said in its filing.

Earlier in August, Reuters reported that SoftBank had held talks with several technology companies, including Amazon.com (AMZN.O) and Nvidia (NVDA.O), which are considering investing in Arm’s IPO.

Arm’s listing is expected to provide a much-needed boost to the IPO market, with big names including grocery delivery service Instacart, marketing automation firm Klaviyo, and German sandal maker Birkenstock expected to go public in the coming weeks.

Arm said it expects to list on the Nasdaq and trade under the ticker symbol ‘ARM’.

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Barclays (BARC.L), Goldman Sachs (GS.N), JPMorgan Chase (JPM.N), and Mizuho Financial Group (8411.T) are the lead underwriters for the offering. Arm, which picked a total roster of 28 banks for the IPO, has not picked a traditional “lead left” bank and will split underwriter fees evenly among the top four banks.

Reporting by Manya Saini and Jaiveer Shekhawat in Bengaluru and Stephen Nellis in San Francisco; additional reporting by Max Cherney in San Francisco and Echo Wang in New York; Editing by Anirban Sen and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

Acquire Licensing Rights, opens new tab

Manya Saini reports on prominent publicly listed U.S. financial firms including Wall Street’s biggest banks, card companies, asset managers and fintechs. Also covers late-stage venture capital funding, initial public offerings on U.S. exchanges alongside news and regulatory developments in the cryptocurrency industry. Her work usually appears in the finance, markets, business and future of money sections of the website.
Contact: 9958867986

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How Indian Billionaire Gautam Adani's Alleged Bribery Scheme Took off and Unraveled

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How Indian Billionaire Gautam Adani's Alleged Bribery Scheme Took off and Unraveled
By Luc Cohen NEW YORK (Reuters) – In June of 2020, a renewable energy company owned by Indian billionaire Gautam Adani won what it called the single largest solar development bid ever awarded: an agreement to supply 8 gigawatts of electricity to a state-owned power company. But there was a problem.
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Brazil’s former President Bolsonaro and aides indicted for alleged 2022 coup attempt

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Brazil’s former President Bolsonaro and aides indicted for alleged 2022 coup attempt

Former Brazilian President Jair Bolsonaro and 36 others were indicted by federal police Thursday on charges of attempting a coup to keep him in office after being defeated in the 2022 elections.

The Associated Press reported that the findings would be delivered to Brazil’s Supreme Court on Thursday, where they will be referred to Prosecutor-General Paulo Gonet to either throw out the investigation or agree with the charges and put Bolsonaro on trial.

Bolsonaro, who leans right politically, has denied claims that he tried to remain in office after his defeat in 2022 to left-wing President Luiz Inácio Lula da Silva.

After losing the election, Bolsonaro launched an aggressive campaign against the Brazilian government that claimed the election was stolen.

BOLSONARO BANNED FROM RUNNING FOR OFFICE FOR 8 YEARS

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Brazilian President Jair Bolsonaro and 36 others were indicted by federal police Thursday. (Evaristo Sa/AFP via Getty Images)

One week after Lula took office, Bolsonaro’s supporters raided and trashed the buildings of the South American country’s Supreme Court, Congress and the presidential palace. Hundreds of them are expected to stand trial.

Since his defeat, Bolsonaro has faced a series of legal threats.

In June 2023, electoral judges voted to ban the former leader from public leadership for eight years after determining he attacked the public’s confidence in the country’s democratic institutions. The court also deemed Bolsonaro a threat to political tensions.

FORMER BRAZILIAN PRESIDENT JAIR BOLSONARO INDICTED BY FEDERAL POLICE IN UNDECLARED DIAMONDS CASE: AP

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Jair Bolsonaro

A Brazilian Supreme Court justice has ordered federal police to question ex-President Jair Bolsonaro over his supporters’ attacks on government buildings following socialist successor Luiz Inacio Lula da Silva’s inauguration. (AP Photo/Eraldo Peres)

The decision was made with four out of seven votes by the Superior Electoral Court.

In July, Bolsonaro was indicted by Brazil’s federal police for alleged money laundering and criminal association in connection with diamonds he allegedly received from Saudi Arabia while he was in office.

It was the second formal accusation of criminal wrongdoing against Bolsonaro, having also been charged in March with forging his and others’ COVID-19 vaccine records.

The former president denies any involvement in either allegation.

 

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On Tuesday, Brazilian police arrested four military and a federal police officer accused of plotting a coup that included plans to overthrow the government following the 2022 election, and allegedly kill Lula and other top officials.

Fox News Digital’s Timothy H.J. Nerozzi and Kyle Schmidbauer, along with The Associated Press, contributed to this report.

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German Defence Minister says he won't run for chancellor in 2025

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German Defence Minister says he won't run for chancellor in 2025

The announcement, which Boris Pistorius made in a video posted to SDP social media channels, clears the way for incumbent chancellor Olaf Scholz to run for a second term.

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Germany’s Defence Minister Boris Pistorius has said he is “not available” to run as a candidate for chancellor in February’s snap election, saying he would instead support Olaf Scholz’s re-election bid.

The announcement, which Pistorius made in a video posted to social media channels belonging to the Social Democratic Party (SDP), ends days of speculation about him replacing Scholz.

“I have emphasized this over and over in recent weeks and I’m saying it again as clearly as possible; in Olaf Scholz, we have an excellent chancellor,” Pistorius, currently polling as Germany’s most popular politician, said.

“He led a coalition that would have been challenging in normal times through possibly the biggest crisis of recent decades.”

He added not running was his “sovereign and entirely personal” decision.

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Collapse of the coalition

Chancellor Olaf Scholz called a snap election after the collapse of the governing ‘Traffic Light Coalition’ at the start of November.

As per German election rules, the Bundestag will hold a government confidence vote on December 16th before voters head to the polls on February 23.  

Germany’s coalition government, made up of the SDP, the FDP and the Greens, collapsed on 7 November after Scholz fired the then Finance Minister and FDP party head, Christian Lindner.

“He (Lindner) has broken my trust too many times”, Scholz told the press at the time, adding that there is “no more basis of trust for further cooperation” as the FDP leader is “more concerned with his own clientele and the survival of his own party.”

The coalition had governed Germany since 2021 and its collapse meant Scholz’s government no longer had a majority in parliament.

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The SDP confirmed on Thursday that they would nominate Scholz as their lead candidate for chancellor next week.

But according to current opinion polls, the chances of Germany’s next chancellor belonging to the centre-left Social Democrats is highly unlikely.

Most pollsters put the centre-right Christian Democrats at more than double the level of support of the SDP.

A tally published on Thursday by political research group Infratest dimap shows the CDU/CSU polling at 33% with the SPD trailing behind at 14%, level with the Greens.

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