Softbank's (SFTBY) Arm filed with the Nasdaq for what could be the year's biggest IPO. Yahoo Finance Senior Reporter Dan Howley explains how the company is going public after Nvidia (NVDA) unsuccessfully tried to take over the company in a move that was blocked by global regulators. Arm is a chip designer, who profits from licensing chips to other companies such as Apple (AAPL), Samsung (SMSN.IL), and Qualcomm (QCOM). Howley notes how the timing is unusual, given the state of the smartphone market, saying "this IPO is coming at almost a strange time as we're seeing a slowdown in smartphone sales across the world."

For more Yahoo Finance coverage on this topic:
Arm expected to unveil new data on IPO filing

Video Transcript

JULIE HYMAN: Well, big news, SoftBank's Arm has filed for an IPO that happened late yesterday, snubbing the London Stock Exchange for the NASDAQ. Information does continue to trickle in about the chip designing company and its upcoming listing. It will be the biggest IPO in the US since Rivian in November 2021.

DAN HOWLEY: Let's bring in Yahoo Finance's Dan Howley to discuss more. And this is a really interesting company, Dan, that has been around for a long time, has switched hands. Nvidia didn't succeed in buying it a couple of years ago. So now it is going to be making its public market debut.

DAN HOWLEY: That's right. Yeah, Nvidia tried that $40 billion takeover, got shut down by global regulators. And so yeah, this is where we are. We're seeing Arm file for the IPO on the NASDAQ. The revenue for the last year was about 2.68 billion for the company.

And just as you said, it's an interesting company. This isn't like TSMC or Intel. They don't build chips themselves. What they do is they design chips and then license those to other companies. We're talking about Apple Samsung Qualcomm, any kind of company that offers a mobile phone or tablet probably is using a Arm chip or an Arm-designed chip.

They're increasingly trying to move into other areas. Those include things like laptops, as well as servers, though that's pretty limited as far as their overall share goes. They're more focused on the mobile side of things. So as much as we'll see them talk about low power compute, that's something they talk about when it comes to the laptops and desktop kind of thing. It really is still all about mobile phones for them.

And so, you know, this IPO is coming at almost a strange time as we're seeing the slowdown in smartphone sales across the globe. Apple warning about a slowdown. And so, you know, and that's even going into a quarter or two where we'll start to see the impact of the newest iPhone.

So we'll have to wait to see what that looks like in the coming months, just as we potentially see people start to pick back up in purchasing those devices. But for Arm, it does come at an off time for the market.