So long, farewell, Arm Holdings...

By Molly Gretton

Arm Holdings, a British technology company that designs semiconductors, recently announced its decision to list on the NASDAQ stock exchange in the United States, despite its status as one of the most successful UK-founded technology companies. This move has generated a lot of attention, with some praising it as a smart strategic decision for the Company, while others are left concerned by the potential implications this move could have on the London Stock Exchange.

From a business perspective, Arm’s decision to list in the US makes sense. The US is the world’s largest and most influential technology market, and by listing there, Arm gains access to a much larger pool of potential investors. This move will allow the Company to raise more capital, which could be used to fuel its growth and expansion plans. Furthermore, it will increase the Company’s visibility and reputation in the tech industry, which could attract more business opportunities and partnerships.

However, despite many months of lobbying from British politicians and the London Stock Exchange, many are hailing this as a major blow to London’s attempt to build the tech credentials of the FTSE 100 and Rishi Sunak’s ambitions to make London the first choice for tech company flotations. Those sceptical of the decision claim that losing a relatively new tech listing to the US could impact efforts to diversify the makeup of the London Stock Exchange (which is already lagging behind other emerging markets), putting it at a disadvantage from a longer-term growth perspective.  Secondly, concerns have been raised about the impact this could have on investor sentiment towards the UK in the long term, alongside the attractiveness of the UK to global companies looking to IPO.

Whichever opinion you take, it is clear that the news of Arm’s decision has highlighted the need for the UK to make significant progress with its regulatory and market reforms in order to remain competitive in a rapidly evolving global market. The government must address the challenges faced by UK-based businesses in accessing the level of capital they need to scale up and pursue big tech listings, to remain attractive to global companies and remain a leading hub for investment.