Arm Holdings will list in New York today after it secured a valuation of $54.5 billion (£43.6bn).
The Cambridge company, which designs the microprocessors used in a vast range of electronic devices – including smartphones, tablets and laptops – snubbed London for the Nasdaq, with trading in its shares to commence from 2.30pm UK time.
Arm, which employs 2,800 staff, was listed in both London and New York when it was bought by Japan’s SoftBank Group Corp in 2016 in a deal worth £23.4bn.
Its technology is also used in various other applications such as servers, IoT devices and automotive systems.
SoftBank had targeted a valuation of $64bn (£51bn) as recently as last month, but the global economic slowdown has impacted revenues from sales, leading to the lower valuation.
It sold all of the 95.5 million shares on offer, representing a 9.4% stake in the company, at the top end of the lowered price range of $51 (£41) per share. SoftBank will remain the majority shareholder in Arm following the listing.
Clients Apple, Google, Nvidia, Alphabet, Advanced Micro Devices, Intel and Samsung had said they would invest in the company via the IPO.
In an interview with the BBC’s Today programme, Arm co-founder Hermann Hauser blamed Brexit for the decision to snub London for New York.
“The hope, of course, was to have a dual listing… but that wasn’t really possible because of the size of the IPO – and the London Stock Exchange isn’t the size it used to be,” he said.
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M&A expert Claire Trachet said: “There is often more potential in the US compared to the UK, so when you are a tech company in Europe, there will always be the question of whether you should list in your home market or go to the US.
“The reason it’s so much stronger now is because the dollar is strong… I think one of the things we will see in the next five or 10 years will be European governments being focused on improving their own currencies to combat this.
“Both global and UK businesses are still looking to list on the LSE; however, until economic conditions strengthen, and investor trust and appetite is restored, the city will continue to experience a largely inactive IPO market.
“I think we will eventually see an increase in UK listings, but this won’t happen until inflation numbers stabilise and looming recession fears fade, lifting the curtain on what remains an uncertain economic outlook.”
Softbank was forced to call off its planned $40bn sale of Arm to Nvidia last year after facing regulatory hurdles in the UK, US and EU.