GlobalFoundries Announces Launch of Initial Public Offering

[btarunr]

GlobalFoundries (GF ), a global leader in feature-rich semiconductor manufacturing, today announced the commencement of its initial public offering of 55,000,000 ordinary shares, 33,000,000 of which are being offered by GF and 22,000,000 of which are being offered by GF's existing shareholder, Mubadala Investment Company PJSC, pursuant to a registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission ("SEC"). The initial public offering price is currently expected to be between $42.00 and $47.00 per share. In connection with the offering, Mubadala expects to grant the underwriters a 30-day option to purchase up to an additional 8,250,000 ordinary shares at the public offering price, less underwriting discounts and commissions. GF has applied to list its ordinary shares on the Nasdaq Global Select Market under the ticker symbol "GFS."

Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit Suisse are acting as active book-running managers for the proposed offering. Deutsche Bank Securities, HSBC and Jefferies are acting as additional book-running managers for the proposed offering. Baird, Cowen, Needham & Company, Raymond James, Wedbush Securities, Drexel Hamilton, Siebert Williams Shank and IMI - Intesa Sanpaolo are acting as co-managers for the proposed offering.



The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus, when available, may be obtained from: Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014; BofA Securities, Inc., NC1-004-03-43, Attention: Prospectus Department, 200 North College Street, 3rd Floor, Charlotte, NC 29255 or by email at dg.prospectus_requests@bofa.com.; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at 866-803-9204 or by email at prospectus-eq_fi@jpmchase.com; Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (800) 831-9146 or by email at prospectus@citi.com; or Credit Suisse Securities (USA) LLC, Attn: Prospectus Department, Eleven Madison Avenue, 3rd Floor, New York, NY 10010, by telephone at 800-221-1037 or by email at usa.prospectus@credit-suisse.com.

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements
This news release may contain forward-looking statements, which involve risks and uncertainties. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. GF undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law.

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[W1zzard]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

 

[Bomby569]

even if they are the worst managers in the world, they are a business that can't have enough production

 

[piloponth]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

Given the current circumstances (that whole bloody world needs Silicon chips), I believe it is a good investment. But not in a short time.
You should be prepared and not surprised if a big drop occurs after IPO (even to the range of $10 for a share). Then I believe it will slowly rise.

 

[Vya Domus]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

Considering they've basically leeched off AMD for a good number of years in order to stay a float and they've failed to deliver 7nm and stay in the cutting edge node business, I don't think so.

Plus, historically speaking, investing long terms in a semiconductor manufacturer is a bad idea in general given how many went bust over the years.

 

[DeathtoGnomes]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

TSMC would have to answer to shareholders now, management would need to think a bit different, and audits can be called more often, poor production perfomance would mean a call for many top management changes.

I lean towards Mubadala offloading, but its state owned by Abu Dhabi. Is there a conflict of interest here ( public vs private investing)? IDK.

 

[Foletta]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

Personally I think GlobalFoundries to be rather weak as an investment case. My guess would be Mubadala is trying to offload the risks of GlobalFoundries and seeking new opportunities, which would be my choice as well if I'd be in their shoes.

Revenue has been on the decline since 2018 and they do negative income. Decline of EPS has halted fairly in 2020, but I wouldn't consider it a saving grace.
In prospectus they say to use the accumulated funds to cover capital expenditure and other corporate purposes. They do state the possibility of acquisition, but I wouldn't lean too much to that possibility.

In certain sense this GFS IPO leans bit more into geopolitics and how someone might want to diversify their semiconductor portfolio. Most of TSMC's production is in Taiwan, which doesn't bode too well with the possibility of overtaking Taiwan back into their control.
GFS has its production USA, Singapore and Germany. While not particularly high end, it still do factor into global supply.

Here's link to the prospetus:

https://www.sec.gov/Archives/edgar/data/1709048/000119312521290644/d192411df1.htm#toc

Disclaimer, I do own TSMC stocks, I have no intention to buy more or sell my position in 30 day period. I will not buy GFS in IPO nor I have short term intention to buy from markets.

 

[yotano211]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

I wouldn't bother. They cut their research budget between 2018 and 2019 by alot. Their revenue from 2018 to 2020 also dropped so its not a growth stock.
They did make a small 330 million in the 1st 6 months of 2021. They might make small amounts of money within the 1-2yrs but I think that's all. I'll pass on this garbage company.

I'd put my extra money, when I get some, on visa and Mastercard. More people are going cashless, especially the younger generation. Both are much safer long term plays.

 

[Fourstaff]

Opinions on whether this will be a good investment? Will the money from the IPO be used for new research? Or is Mubadala just trying to offload their debt?

Not the biggest fan of foundries in general, even TSMC. The moment they fall behind, its easy for IP designers (Apple, Nvidia, etc.) to change to another foundry. Even at the best of times, their ROIC is really poor due to the heavy investments needed to sustain the revenue (R&D, more capacity, etc.).