A key figure in the creation of Arm has said the UK government is only just waking up to the fact that London is struggling to attract leading tech company listings, adding that New York was the obvious choice for the British-based chip designer’s primary stock market flotation.
Hermann Hauser, who co-founded Acorn Computers and helped to develop Arm’s first processor before it was spun out as a separate company, said it was an issue of a lack of liquidity in London and poor support and infrastructure for local firms.
“The problem with London is it’s really too small for a company of the size of Arm to do it alone,” Hauser said.
“There isn’t the liquidity for technology stocks in London, London doesn’t have the analyst cover of technology companies that New York has, and sadly, it doesn’t have the same cachet for technology companies as New York,” Hauser told BBC Radio 4’s Today programme.
Hauser said a dual structure could solve the issue of London’s lack of liquidity and analyst expertise. “A co-listing with New York would be the natural solution,” he said.
“Arm is a UK company. It worked well with a dual listing before and I’m very much in favour of having a dual listed in London again.”
Analysts have estimated that Arm could be worth up to $40bn (£32.1bn) when it goes public.
A New York listing would be a blow to Boris Johnson and the chancellor, Rishi Sunak, who last year tried to make London more attractive to tech firms by controversially giving founders more control through dual class share structures and slashing the number of shares required to be offered to the public to just 10%.
It emerged earlier this week that the prime minister joined the lobbying efforts – already under way by London Stock Exchange executives and a number of government departments and senior officials – to try to convince Arm to float its shares in London.
It culminated in Johnson writing a letter to bosses at Arm’s Japanese parent company, SoftBank, as part of his last-ditch charm offensive.
After the collapse of the $66bn sale of the Cambridge-based business to US-based Nvidia earlier this year, Masayoshi Son, the chief executive of Softbank, snubbed the UK for a flotation.
“We think that the Nasdaq stock exchange in the US, which is at the centre of global hi-tech, would be most suitable,” he said in February.
Hauser said parliament was late to realise the importance of fostering burgeoning tech firms. “Tech sovereignty has become one of those key issues of the decade and even technologically illiterate politicians like Johnson and the majority of parliament sadly have woken up to the fact that it is important to support the local technology companies with local stock exchanges,” Hauser said.
“So it’s a little late of a wake-up call but better late than never.”
