SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
It sort of make sense for Nvidia&#x27;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&#x27;s peak this deal was worth &quot;<i>$87bn</i>&quot;. For a company that makes less than $2B in revenue and at best ~$300M in Operating Income. Remember this isn&#x27;t something you can buy and milk the crap out of other market players. &quot;Not a very British way of doing business&quot; is A Direct Quote from ARM. ( Edit: Because of perceptual licensing agreement, for those unaware of how ARM business model works )<p>It didn&#x27;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 <i>saner</i> valuation of P&#x2F;E 50. It make even less sense to me when Softbank bought it for $32bn. Didn&#x27;t make any sense when Nvidia want it for $38.5bn, and later at $50bn+.<p>Now we are back to square one, how many investors, in the open market are willing to buy ARM&#x27;s stock at a valuation of, let say the same $32bn as Softbank initially paid? Roughly P&#x2F;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.<p>And of course many on HN will think ARM is worthless because the future is going to be the Riscy Silver Bullet.<p>Disclosures: I do not currently hold any stocks or Mutual Funds, Indexes and other financial instrument.