If SoftBank want to maximize their return then they'd probably do best to list ARM in the US. There's no way they'd get the crazy valuations you seen on NASDAQ on the LSE. It's why so many UK tech companies IPO in New York. They don't seem to get particularly excited about tech in London.
SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
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Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#62Hopefully it will end back on the LSE, there was much lamenting here in the UK when SoftBank acquired them. They are one of the UKs biggest tech success, one of our few “unicorns”. For them to be be back on the LSE it would be a good signal of strength in UK tech. I wouldn’t be surprised if there is some lobbying going on behind the scenes from the UK government to try and ensure it happens. Some strategic tax brakes…
Does it matter where it IPOs?
For governments, exchanges, indices, certain investors, and economies yes.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#63>ARM to IPO I'll be looking to pick up some shares as a long-term investment. I think ARM is one of the best things to happen to computing, and anything that threatens the x86 monoculture/hegemony is a good thing in my view.
Honestly at this point, any big tech IPO is just a license to print money.
Might not be that way when they go public a year from now
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#64It sort of make sense for Nvidia's shareholders. The initial offering for ARM was only worth $38.5bn, which was already expensive due to SoftBank initial purchase price and not wanting for a loss. But at Nvidia's peak this deal was worth "$87bn". For a company that makes less than $2B in revenue and at best ~$300M in Operating Income. Remember this isn't something you can buy and milk the crap out of other market players. "Not a very British way of doing business" is A Direct Quote from ARM. ( Edit: Because of perceptual licensing agreement, for those unaware of how ARM business model works )
It didn't make sense how ARM was worth $22bn in 2016 on LSE, that has a PE100+ when I cant see how it could double its Net profit in the next 10 years, with a saner valuation of P/E 50. It make even less sense to me when Softbank bought it for $32bn. Didn't make any sense when Nvidia want it for $38.5bn, and later at $50bn+.
Now we are back to square one, how many investors, in the open market are willing to buy ARM's stock at a valuation of, let say the same $32bn as Softbank initially paid? Roughly P/E 100, assuming they managed to grow ARM business from 2018 at ~$220M operating income to $300M in 2021. I much rather bet on Intel if I had the money.
And of course many on HN will think ARM is worthless because the future is going to be the Riscy Silver Bullet.
Disclosures: I do not currently hold any stocks or Mutual Funds, Indexes and other financial instrument.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#65Hopefully it will end back on the LSE, there was much lamenting here in the UK when SoftBank acquired them. They are one of the UKs biggest tech success, one of our few “unicorns”. For them to be be back on the LSE it would be a good signal of strength in UK tech. I wouldn’t be surprised if there is some lobbying going on behind the scenes from the UK government to try and ensure it happens. Some strategic tax brakes…
The UK gov is keen for Revolut (another SoftBank investment) to IPO in London as well, but it looks like they're trying to court Americans so they can make a bigger splash there.
Absolutely no chance Revolut lists in London. They're super globally-focused and the founder wouldn't take the loss.
Starling bank on the other hand, is a great prospect. It's still founder-controlled, UK-focused, and would be able to join the FTSE 250/100 quite easily where the S&P is beyond its reach.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#66I think it's interesting how selling Arm to Nvidia or going IPO are _wildly_ different and I think SoftBank doesn't mind what happens to the company as long as they get their return. I mean, at the end of the day financiers will finance but if you're Arm employee this must be a pretty wild ride.
SoftBank is desperate for capital due to recent bad bets. ARM is one of the most valuable assets they have. As for ARM itself, this probably isn't the best path forward, and neither option would even be considered if it weren't for SoftBank's current predicament.
It's weird, according to the FT they only want the capital to finance share buybacks. So, basically, they want to prop up their share price.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#67My memory might fail me, but I think the compiler wizards were building all the core FB stuff on aarch64 back in like 2014-2015 or something.
Someone saw further down the road than I did.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#68Earlier quoted context omitted.
Does it matter where it IPOs?
It's a Brexit anxiety thing. If a big boy like ARM goes public in London the PM can wave the flag on TV and say we're world class.
Yep, but it's no guarantee ARM will list on the LSE considering recent UK EV maker Arrival crossed the pond for a decent IPO.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#69Hopefully it will end back on the LSE, there was much lamenting here in the UK when SoftBank acquired them. They are one of the UKs biggest tech success, one of our few “unicorns”. For them to be be back on the LSE it would be a good signal of strength in UK tech. I wouldn’t be surprised if there is some lobbying going on behind the scenes from the UK government to try and ensure it happens. Some strategic tax brakes…
> one of our few “unicorns” “There are currently 37 private $1b+ businesses headquartered in the UK—a further 14 have exited, whilst 2 are no longer active 13 UK companies became unicorns in H1 2021—the largest concentration of new unicorns to date” from: https://www.beauhurst.com/research/unicorn-companies/
True and really it’s not a Unicorn as it’s been public before.
You inspired me to have a look at how many “Unicorns” are in the US for comparison. Depending on source it’s between about 400-480 in the US. So about 12x as many with about 4.8x the population.
Re: SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
#70It sort of make sense for Nvidia's shareholders. The initial offering for ARM was only worth $38.5bn, which was already expensive due to SoftBank initial purchase price and not wanting for a loss. But at Nvidia's peak this deal was worth " $87bn ". For a company that makes less than $2B in revenue and at best ~$300M in Operating Income. Remember this isn't something you can buy and milk the crap out of other market p…
Have their profitability prospects taken a hit because of whatever happened at ARM China?