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Nvidia to Acquire Arm for $40B

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Re: Nvidia to Acquire Arm for $40B

#391

Post by oxfordmale »

walterbell wrote: post #273
Blammar wrote: post #243

No one has seemed to notice the following two things: "To pave the way for the deal, SoftBank reversed an earlier decision to strip out an internet-of-things business from Arm and transfer it to a new company under its control. That would have stripped Arm of what was meant to be the high-growth engine that would power it into a 5G-connected future. One person said that SoftBank made the decision because it would hav…

There were two separate IoT business units: Platform ( https://pelion.com ) and Data ( https://www.treasuredata.com/ ). The Platform unit fits the Segars post-acquisition comment about end-to-end IoT software architecture, https://news.ycombinator.com/item?id=24465005 > One person close to the talks said that Nvidia would make commitments to the UK government over Arm’s future in Britain, where opposition politicians…

The UK government never learns. Kraft made similar promises when buying Cadbury regarding jobs,but quietly reneged on them over time. The Kraft CEO was asked to show up before an UK parliament committee, but of course declined, and that was the end of the story.

Re: Nvidia to Acquire Arm for $40B

#392

Post by imtringued »

jacques_chester wrote: post #90
bleepblorp wrote: post #31

This isn't going to do good things for anyone who doesn't own a lot of Nvidia stock. This is going to do especially bad things for anyone who needs to buy a cell phone or the SoC that powers one. There's no real alternative to ARM-based phone SoCs. Given Nvidia's business practices, any manufacturer who doesn't already have a perpetual ARM license should expect to have to pay a lot more money into Jensen Huang's reti…

> This isn't going to do good things for anyone who doesn't own a lot of Nvidia stock. If it makes you feel any better, studies of acquisitions show that most of them are duds and destroy acquirer shareholder value.

Well, the commenter is actively worried about Nvidia destroying shareholder value. If you destroy ARM in the process of acquiring it the combined company will be worth less in the long run. If the acquisition was actually motivated by synergy then Nvidia could have gotten away with a much cheaper license from ARM.

Re: Nvidia to Acquire Arm for $40B

#393

Post by HenryBemis »

siberianbear wrote: post #333
pathseeker wrote: post #296

Earlier quoted context omitted.

>Also, to first order, when a company issues stock to purchase another corporation, that cost is essentially "free" since the value of the corporation increases. This isn't correct. If investors thing Nvidia overpaid, its share price will decline. There are many examples of acquiring companies losing significant value on announcements to buy other companies even in pure stock deals.

In addition, it's not even a valid argument if the cost was entirely in cash. One would be making the argument, "the cost is essentially free because although we spent $40B, we acquired a company worth $40B". Obviously, that's not any more correct than the case of paying in stock.

Correct, if it's shares, they just dilluted the value of the stock. If I owned 1% of the company, after printing and handing out $40bn worth of stock, then I keep the same amount of stock, but now it's (e.g.) 0.5%, which means I just lost 50% of that investment. Which means I will receive 50% of the dividend (since out of the next year's dividend 'pool' someone will get a big chunk. Which means NVidia just screwed the existing shareholders (for the time being, and once the numbers/$ are merged I should be getting my dividend by two parts, one from ARM and one from NVIDIA).

If they gave away cash, that's a different story, it all depends.. if they were sitting on $1tn cash, and the spent $40bn, that's no biggie. I mean we went through COVID, what worse can come next?

Re: Nvidia to Acquire Arm for $40B

#394

Post by inlined »

smabie wrote: post #356
pathseeker wrote: post #296

Earlier quoted context omitted.

>Also, to first order, when a company issues stock to purchase another corporation, that cost is essentially "free" since the value of the corporation increases. This isn't correct. If investors thing Nvidia overpaid, its share price will decline. There are many examples of acquiring companies losing significant value on announcements to buy other companies even in pure stock deals.

It's rare for the acquiring companies stock to not decline, regardless of whether the market thinks they overpaid.

I worked at Parse when it was bought by Facebook. The day the news broke, Facebook’s market cap grew by multiples of the acquisition price. I remember being gobsmacked that Facebook effectively got paid to buy us.

Re: Nvidia to Acquire Arm for $40B

#395

Post by deafcalculus »

nVidia clearly wants to compete with Intel in data centers. But how does buying ARM help with that? They already have an architectural license.

Right now, I can see nVidia replacing Mali smartphone GPUs in low to mid-end Exynos SoCs and the like. But it's not like nVidia to want to be in that low-margin area.

Re: Nvidia to Acquire Arm for $40B

#396

Post by unnouinceput »

tuananh wrote: post #383
hn3333 wrote: post #382

Softbank buys low ($32B in 2016) and sells high ($40B in 2020). Nice trade!

i thought that would be low in investment world.

4 years, 8 billions. 2 B / year. I don't think that's low. And during this time Arm was also filling its owner coffers. The only real question here is if they filled the coffers at a greater 2B/year or not. My guess is they didn't. Now SoftBank has a lot of cash to acquire more shining toys.

Re: Nvidia to Acquire Arm for $40B

#397

Post by kzrdude »

kabacha wrote: post #279
dannyw wrote: post #158

Earlier quoted context omitted.

Apple would not get antitrust approval (iPhone maker controls all android chips????). So that’s why.

Exactly, Apple is already straddling the line (and imho way past it) on anti-comp laws.

I'm not defending Apple, just thinking that can't we say this for many of the biggest tech firms? They are way past the line on anticompetitive business.

Re: Nvidia to Acquire Arm for $40B

#398

Post by awill »

kllrnohj wrote: post #280
wyldfire wrote: post #263

Earlier quoted context omitted.

Qualcomm used to design their own cores up until the last generation or two, but you're right they use the reference designs now. EDIT: correction, make that the last generation or four (oops, time flies)

Qualcomm hasn't used an in-house core design since 2015 with the original Kryo. Everything Kryo 2xx and newer are based on Cortex.

That was a really sad time honestly. QCOMM went from leading the pack to basically using reference designs (which they still arrogantly brand as Kryo despite essentially being a tweak of a reference design.

It all happened because Apple came out with the first 64-bit design, and QCOMM wasn't ready. Rather than deliver 32-bit for 1 more year, they used an off the shelf ARM 64-bit design (A57) in their SoC called the Snapdragon 810, and boy was it terrible.

Re: Nvidia to Acquire Arm for $40B

#399

Post by LoSboccacc »

oxfordmale wrote: post #391
walterbell wrote: post #273

Earlier quoted context omitted.

There were two separate IoT business units: Platform ( https://pelion.com ) and Data ( https://www.treasuredata.com/ ). The Platform unit fits the Segars post-acquisition comment about end-to-end IoT software architecture, https://news.ycombinator.com/item?id=24465005 > One person close to the talks said that Nvidia would make commitments to the UK government over Arm’s future in Britain, where opposition politicians…

The UK government never learns. Kraft made similar promises when buying Cadbury regarding jobs,but quietly reneged on them over time. The Kraft CEO was asked to show up before an UK parliament committee, but of course declined, and that was the end of the story.

it's all posturing unless the government makes the company to agree to punitive severance packages to be put in an escrow account to be released to the company after 20 years or to the people if fired before that.
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