An anchor investor is a company that purchases a large number of shares in a company at a fixed price before its IPO, helping generate interest and attract other investors.
Citing people familiar with the matter, news agency Reuters claimed that Arm plans to list on the Nasdaq in early September and is seeking to raise $8 billion to $10 billion.
Why tech companies are interested in Arm
Major tech companies, including Apple (A series chips), Samsung (Exynos), Google (Tensor), and Qualcomm are some of the companies that rely on Arm processors. Amazon Web Services, the e-commerce company’s cloud business, makes its own processing chip called Graviton using Arm’s design.
Arm has reportedly been in talks with about 10 technology companies, including Intel, Google-parent Alphabet, Samsung and Nvidia, among other companies about an investment ahead of its IPO. These investors would not gain any board seat or control, the sources were quoted as saying.
It is being reported that purchasing a percentage of stake each will make them long-term shareholders and stabilise the Arm stock price. These investments will also give the companies some advantage over Arm’s management.
Arm’s failed Nvidia deal
Last year in February, US-based Nvidia tried to buy Arm for $44 billion but the deal was blocked due to objections from the US and European antitrust regulators. It is expected that the chip designer’s value, when it goes public, is also expected to exceed $60 billion.