Japans SoftBank anticipates a 60 billion arm placement
Hardware

Japan’s SoftBank anticipates a $60 billion arm placement

The deal with NVIDIA that SoftBank expected to raise $40 billion for Arm assets fell through, and now the Japanese group expects to list the British processor architecture developer, estimating a potential capitalization of $60 billion The IPO is scheduled to take place before the end of March next year.

    Image source: Future Investment Initiative, Nikkei

Image source: Future Investment Initiative, Nikkei

Accordingly Bloomberg, the event will be preceded by an $8 billion Arm stock-backed loan from a group of at least 10 banks to SoftBank Corporation. SoftBank’s management, the source explains, likes to use this to test potential investors who will later participate in an IPO. SoftBank plans to repay the loan in either cash or ARM stock in two years. Creditors include Mizuho Financial Group, JPMorgan Chase, Goldman Sachs and Barclays.

Considering that SoftBank bought $32 billion of Arm stock from the market in 2016, a nearly 2-fold increase in capitalization at its next IPO could be considered a good result, especially given the decline in investor interest in tech stocks this year. In the case of Arm, the situation is made worse by the fact that the company, which controls the huge market for mobile processors, does not generate as much annual revenue – about $ 2.6 billion, and the company’s basic valuation at current prices does not more than equals $30 billion, so the goals for the IPO seem very ambitious.

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About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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