SoftBank aims to keep control of Arm after IPO – report SoftBank is said to be planning to keep a controlling stake in Arm after its public offering, rather than divesting itself of the chip design firm as had been thought. The move may indicate that SoftBank does not believe it would get the valuation it has been seeking for a full sale of Arm. The planned initial public offering …
They probably wouldn't worry so much if Intel had a small stake in ARM. Intel wants to start fabbing chips designed by others, and that includes ARM chips. So a small stake- with lots of other companies to prevent Intel from abusing it - seems reasonable.
Obviously Intel buying 100% of ARM would be blocked.
ARM is merely a plaything of the financial markets now. After the "Golden Rule" of them being an independent IP licensing entity was broken the game was afoot. The ridiculous valuation could only be justified by the buyer abusing ARM's market dominance to cripple their competitors. Softbank didn't do that (it was merely interested in fetching tens of billions in profit) but it's almost certain NVidia would have, had it been allowed to.
The seeds of doom were planted many years ago when they took ARM to the stock market. Henceforth it was only a matter of time before greedy investors demanded ARM be sold off with a huge premium.
SoftBank really fucked up when they bought ARM, didn't they? It should never have been sold. And they have probably put rocket boosters under RISC-V and ruined a great British success story (not that ARM won't be profitable for many years). But you can't help but smile at how badly the investors misread the market.
Which investors? Softbank got ARM for 30% off following the Brexit currency response and on top of that Japanese interest rates being negative. They got in long before Trump accelerated the inevitable trade wars with China/US.
It seems Softbank make all the right moves and make an entry strategy within hours but take years trying to build any valid exit strategy. The realistic buyers for ARM are slim if you could actually understand the business model and there are plenty of senior figures in ARM which know nothing of the company and its tech or its customers.
The worst thing that happened ARM was May/Hammond and Softbank agreeing that they would double headcount without any real business strategy to increase revenue, I guarantee the CEO and founders of the time wet at the lips for the 50% premium on the shares sitting in No.10 blowing hot air up Maybots blouse talking about some 30 year plan about "the internet of things" which was the "metaverse" of the time back in 2016 where tech companies would justify their lack of strategy on such a hot buzzword.
If it increases in value as the current semiconductor mess eases, then they will get some money now and more later as they sell off the rest of ARM over time.
They want some money now, so they can spend that money on something else. They think the price will go up over time, so by keeping part of ARM for now and selling it later, they think they will get more money overall.
If Softbank expect the value to increase, then it will also increase for small investors.
Everything depends on the strategic response to RISC V. The newcomer holds emotional favour right now because of the open source ISA but that won't necessarily make it cheaper in the market. It is likely to be preferred in the education sector where it was born, which will give it the advantage in the lower power devices and it will grow upwards from there. The brains at ARM will be considering what they need to do to maintain their place or what new position to take.
ARM is already more profitable than it was when it was bought. But firm valuations are driven largely by the cost of capital and this is getting more expensive as interest rates rise and this is probably the reason for selling in chunks: some money now in the hope of more when interest rates fall again.
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