SoftBank's Sale of Arm to Nvidia Collapses, Arm to IPO
It 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 "<i>$87bn</i>". 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 )<p>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 <i>saner</i> 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+.<p>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.<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.