| To: Glenn Petersen who wrote (6009) | 8/21/2023 5:26:24 PM | | From: Glenn Petersen | | | | The Arm F-1: F-1 (sec.gov)
Arm files for Nasdaq listing, as SoftBank aims to sell shares in chipmaker it bought for $32 billion
PUBLISHED MON, AUG 21 20234:29 PM EDT
UPDATED 5 MIN AGO
Kif Leswing @KIFLESWING
Arjun Kharpal @ARJUNKHARPAL
CNBC.com
KEY POINTS
-- Arm, which is owned by SoftBank, filed on Monday to list on the Nasdaq.
-- The U.K.-based chipmaker is looking to go public during a historically slow period for U.S. IPOs.
-- SoftBank agreed to acquire Arm for $32 billion in 2016.
Arm, the chipmaker owned by Japan’s SoftBank, filed for a Nasdaq listing on Monday, positioning itself to go public during a historically slow period for tech IPOs.
The company wants to trade under the ticker symbol “ARM.”
Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March, according to the filing. Arm’s 2023 revenue was slightly down from the company’s 2022 sales of $2.7 billion.
The U.K.-based company filed confidentially for a listing in the U.S. earlier this year after previously announcing it would go public in the U.S. over the U.K., dealing a blow to the London Stock Exchange.
Arm is one of the most important chip companies. It sells licenses to an instruction set at the heart of nearly every mobile chip, and increasingly, PC and server chips as well. In recent years, it has aimed to sell more complete chip designs, which is more lucrative.
ARM chips are made by companies including Amazon, Alphabet, AMD, Intel, Nvidia, Qualcomm, and Samsung, according to the filing. Its technology is also included in Apple’s chips for iPhones. Arm said that its technology was included in over 30 billion chips shipped in its fiscal 2023. Arm typically takes a fee on every chip that is shipped using its technology.
SoftBank originally sought to sell Arm to chip giant Nvidia, but the deal faced major pushback from regulators, who raised concerns over competition and national security. SoftBank took Arm private in 2016 in a deal valued at $32 billion.
Arm did not provide a projected share price, so it’s not yet possible to estimate its valuation.
A critical component
Arm, with just under 6000 employees, plays a pivotal role in the world of consumer electronics, designing the architecture of chips that are found in 99% of all smartphones, making it a key provider of technology to Apple, Google and Qualcomm.
The company was founded in 1990 as a joint venture between several companies and Apple to create a low-power processor for battery-powered devices. It first went public in 1998, before being taken private in 2016 by SoftBank.
But the company is also facing headwinds from a slowdown in demand for products like smartphones, which has hit chip firms across the board. Arm’s net sales fell 4.6% year-on-year in the second quarter, while the unit swung to a loss, according to SoftBank’s earnings release. SoftBanks’ beleaguered Vision Fund, meanwhile, has racked up billions of dollars in losses of late due to tech bets that soured in a high interest rate environment.
In its filing, Arm made the case that its technology would be essential for AI applications, although it focuses on central processors, not the graphics processors that are required for creating big AI models. “The CPU is vital in all AI systems, whether it is handling the AI workload entirely or in combination with a co-processor, such as a GPU or an NPU,” Arm said in the filing.
Arm identified x86, the instruction set used in Intel and AMD processors, as well as RISC-V, an open source instruction set backed by several big tech companies, as sources of competition.
Arm is poised to hit the market at a time when investors are flocking to next-generation semiconductors because of the demand spurred by artificial intelligence, most notably the soaring popularity of generative AI applications. Nvidia, the chipmaker most at the heart of the generative AI boom, has seen its stock price triple this year.
However, the tech IPO market has been largely dormant for the past 20 months, with no notable venture-backed deals since Dec. 2021. Last October, Intel spun out self-driving car technology company Mobileye. That stock is up just 17% since its first day close.
Some tech investors may be looking to ARM’s offering as an indication of demand for new offerings. Grocery delivery company Instacart is among late-stage startups that are reportedly preparing to submit IPO paperwork to the SEC.
Arm files for Nasdaq listing, as SoftBank sells shares in chipmaker (cnbc.com) |
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| From: Glenn Petersen | 9/1/2023 9:01:02 PM | | | | | | Exclusive: Arm signs up big tech firms for IPO at $50 bln-$55 bln valuation -sources
By Echo Wang
Reuters
September 1, 20236:39 PM CDT
Updated an hour ago
NEW YORK, Sept 1 (Reuters) - Customers of Arm Holdings Ltd including Apple Inc (AAPL.O), Nvidia Corp (NVDA.O), Alphabet Inc (GOOGL.O) and Advanced Micro Devices Inc (AMD.O) have agreed to invest in the chip designer's initial public offering, according to people familiar with the matter.
Intel Corp (INTC.O), Samsung Electronics Co Ltd (005930.KS), Cadence Design Systems Inc (CDNS.O) and Synopsys Inc (SNPS.O) have also agreed to participate as investors in the offering, the sources added. The talks are ongoing and some other potential investors are also in discussions to invest in the IPO, the sources added.
SoftBank Group Corp (9984.T), which owns Britain-based Arm, is targeting a valuation between $50 billion and $55 billion, Reuters reported earlier on Friday. Arm's clients have agreed to invest in that valuation range, the sources said.
While it is possible that demand for Arm's shares will lead to a higher valuation by the time the IPO prices, the move represents a climb-down from the $64 billion valuation at which SoftBank acquired the 25% stake in the company it did not already own from its $100 billion Vision Fund last month.
Apple, Nvidia and the other strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO, the sources said. Arm and SoftBank have set aside 10% of the shares to be sold in the IPO for its clients, Reuters has previously reported.
Amazon.com Inc (AMZN.O), which had previously held talks to invest in the IPO, has decided not to participate, one of the sources said, requesting anonymity as the discussions are confidential.
A scramble among Arm's clients, comprising the world's biggest technology companies, to snap up shares in the IPO is testing the semiconductor designer's adherence to not picking sides in the chip industry.
The interest is fueled by a desire by companies to expand their commercial relationship with Arm and make sure rivals do not gain an edge, Reuters has previously reported.
While an investment in the IPO would not come with a seat on Arm's board or ability to dictate strategy, it could strengthen ties with each participating company and make it harder for a competitor to acquire Arm later.
Arm and SoftBank did not immediately respond to requests for comment.
AMD, Intel, Synopsys and Nvidia declined to comment. Alphabet, Amazon, Apple, Samsung and Cadence did not immediately respond to requests for comment. The Wall Street Journal reported on Arm's valuation target earlier on Friday.
Reporting by Echo Wang in New York; Editing by Anirban Sen and Rosalba O'Brien
Exclusive: Arm signs up big tech firms for IPO at $50 bln-$55 bln valuation -sources | Reuters |
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| To: Glenn Petersen who wrote (6011) | 9/13/2023 5:22:55 PM | | From: Glenn Petersen | | | | Arm prices IPO at $51 per share, valuing company at over $54 billion
PUBLISHED WED, SEP 13 20234:14 PM EDT
UPDATED 2 MIN AGO
Leslie Picker @LESLIEPICKER
Kif Leswing @KIFLESWING
CNBC.com
KEY POINTS
-- Chip design company Arm priced its long-awaited initial public offering on Wednesday.
-- Masayoshi Son’s SoftBank will own about 90% of the company after the offering.
-- Arm customers, including Apple, Google, Nvidia and Samsung, have said they will buy shares in the IPO.
Arm, the chip design firm that supplies core technology to companies including Apple and Nvidia, priced its initial public offering at $51 a share, according to a source familiar with the matter.
Arm’s fully diluted market cap, which includes outstanding restricted stock units, is over $54 billion at the $51 offer price.
The U.K.-based company is listing at least 95.5 million American depository shares on the Nasdaq, and SoftBank, its current owner, will control about 90% of the company’s outstanding shares.
The offering is at the top of Arm’s expected price range of $47 to $51. The company will start to trade Thursday under the symbol “ARM.”
Arm said in its prospectus that revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion. Net income in fiscal 2023 dropped 22% to $524 million.
Arm is riding the wave of excitement around artificial intelligence as it aims to crack open the tech IPO market after a nearly two-year pause. It’s set to be the biggest technology offering of the year.
Arm’s valuation for a chip company is exceedingly rich when compared to any player in the market other than Nvidia. At $54 billion, Arm would carry a price-to-earnings multiple of about 104, based on profit in the latest fiscal year.
Nvidia is valued at 108 times earnings, but that’s after forecasting revenue growth of 170% for the current quarter, driven by AI chips. The Invesco PHLX Semiconductor ETF, which is designed to measure the performance of the 30 biggest U.S. chip companies, has a price-to-earnings ratio of about 25.
Many of Arm’s most important customers, including Apple, Google, Nvidia, Samsung, AMD, Intel and Taiwan Semiconductor Manufacturing Company, said they would buy shares as part of the offering. Arm’s technology is used in 99% of mobile processors around the world.
Arm’s architecture outlines how a central processor works at its most basic level, such as how to do arithmetic or how to access computer memory. The company was originally founded in 1990 to build chips for devices with batteries and took off when it started to be widely used in smartphone chips. Arm’s instruction set uses less power than the x86 architecture used in PC and server chips by Intel and AMD.
While some of Arm’s customers just use the instruction set and design their own CPUs, Arm also licenses entire designs of its own to chipmakers they can use as CPU cores in their own chips. Amazon uses Arm CPU designs in some of its server chips.
In a presentation to investors, Arm officials said the company has room to grow beyond just smartphones and wants to design more chips for data centers and AI applications. It said it expects the total market for chip designs to be worth about $250 billion by 2025.
Correction: A prior version of this story had the incorrect IPO price
Arm prices IPO at $51 a share, valuing company at over $54 billion (cnbc.com) |
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| To: Glenn Petersen who wrote (6012) | 9/13/2023 8:15:04 PM | | From: Elroy | | | | Is one way to think about Arm as they license subroutines that are used by other chip makers in designing chips?
So you can use Arm's "cores" to provide some off the shelf chip functions, and then your chip designers customize your IP around the cores, and together you've got a chip with some function, and the chip designer owes Arm some license fee based on the core useage?
In other words, chip design subroutines? |
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| To: Glenn Petersen who wrote (6014) | 9/14/2023 8:08:46 PM | | From: Glenn Petersen | | | | Arm climbs 25% in Nasdaq debut after pricing IPO at $51 a share
PUBLISHED THU, SEP 14 202312:11 PM EDT
Rohan Goswami @IN/ROHANGOSWAMICNBC/ @ROGOSWAMI
Kif Leswing @KIFLESWING
KEY POINTS
-- Arm Holdings has started trading on the Nasdaq under the ticker “ARM.”
-- The chip design company is valued at a steep premium relative to the rest of the semiconductor market.
-- SoftBank still holds about 90% of Arm’s stock.
Arm CEO Rene Haas and executives cheer as Softbank’s Arm, a chip design firm, holds an initial public offering at the Nasdaq MarketSite in New York, Sept. 14, 2023. / Brendan Mcdermid | Reuters
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Arm Holdings, the chip design company controlled by SoftBank, jumped nearly 25% during its first day of trading Thursday after selling shares at $51 a piece in its initial public offering.
At the open, Arm was valued at almost $60 billion. The company, trading under ticker symbol “ARM,” sold about 95.5 million shares. SoftBank, which took the company private in 2016, controls about 90% of shares outstanding.
On Wednesday, Arm priced shares at the upper end of its expected range. On Thursday, the stock first traded at $56.10 and ended the day at $63.59.
It’s a hefty premium for the British chip company. At a $60 billion valuation, Arm’s price-to-earnings multiple would be over 110 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% growth forecast for the current quarter.
Arm Chief Financial Officer Jason Child told CNBC in an interview that the company is focusing on royalty growth and providing products to its customers that cost and do more.
Many of Arm’s royalties come from products released decades ago. About half the company’s royalty revenue, which totaled $1.68 billion in 2022, comes from products released between 1990 and 2012.
“As a CFO, it’s one of the better business models I’ve seen. I joke sometimes that those older products are like the Beatles catalog, they just keep delivering royalties. Some of those products are three decades old,” Child said.
In a presentation to investors, Arm said it expects the total market for its chip designs to be worth about $250 billion by 2025, including growth in chip designs for data centers and cars. Arm’s revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion.
Arm’s architecture is used in nearly every smartphone chip and outlines how a central processor works at its most basic level, such as doing arithmetic or accessing computer memory.
Child said the company sold $735 million in shares to a group of strategic investors comprising Apple, Google, Nvidia, Samsung, AMD, Intel, Cadence, Synopsis, Samsung and Taiwan Semiconductor Manufacturing Company. It’s a testament to Arm’s influence among chip companies, which rely on Arm’s technology to design and build their own chips.
“There was interest to buy more than what was indicated, but we wanted to make sure we had a diverse set of shareholders,” Child said.
In an interview with CNBC on Thursday, SoftBank CEO Masayoshi Son emphasized how Arm’s technology is used in artificial intelligence chips, as he seeks to tie the firm to the recent boom in AI and machine learning. He also said he wanted to keep the company’s remaining Arm stake as long as possible.
The debut could kick open the market for technology IPOs, which have been paused for nearly two years. It’s the biggest technology offering of 2023.
Arm IPO: (ARM) starts trading on the Nasdaq in win for SoftBank (cnbc.com) |
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| From: Glenn Petersen | 11/1/2023 5:09:18 AM | | | | | | WeWork plans to file for bankruptcy as early as next week, source says
Reuters
November 1, 20232:27 AM CDT
Updated 2 hours ago
Oct 31 (Reuters) - WeWork (WE.N) plans to file for bankruptcy as early as next week, a source familiar with the matter said on Tuesday, as the SoftBank Group-backed company struggles with a massive debt pile and hefty losses.
Shares of the flexible workspace provider fell 32% in extended trading after the Wall Street Journal first reported the news. They have fallen roughly 96% this year.
New York-based WeWork is considering filing a Chapter 11 petition in New Jersey, the WSJ reported, citing people familiar with the matter
WeWork declined to comment.
Earlier on Tuesday, WeWork said it had entered into an agreement with creditors for temporary postponement of payments for some of its debt, with the grace period nearing an end.
The company had net long-term debt of $2.9 billion as of June end and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial real estate sector.
WeWork's filing for bankruptcy would mark a stunning reversal of fortune for the company that was privately valued at $47 billion in 2019 and a black spot for investor SoftBank that sunk billions.
The company has been in turmoil ever since its plans to go public in 2019 imploded following investors' skepticism over its business model of taking long-term leases and renting them for the short term and worries over its hefty losses.
WeWork's woes did not abate in subsequent years. It finally managed to go public in 2021 at a much-reduced valuation. Its major backer, Japanese conglomerate SoftBank, sunk tens of billions to prop up the startup, but the company has continued to lose money.
WeWork raised "substantial doubt" about its ability to continue operations in August, with numerous top executives, including CEO Sandeep Mathrani, departing this year.
Reporting by Anirban Sen in New York, Manas Mishra and Manya Saini in Bengaluru; Editing by Shailesh Kuber and Anil D'Silva
WeWork plans to file for bankruptcy as early as next week, source says | Reuters |
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| From: Glenn Petersen | 11/9/2023 5:46:10 AM | | | | | | SoftBank posts $6.2 billion quarterly loss as WeWork collapse, tech slump drag bottom line
PUBLISHED THU, NOV 9 20231:15 AM EST
UPDATED AN HOUR AGO
Arjun Kharpal @ARJUNKHARPAL
CNBC.com
KEY POINTS
- SoftBank posted an investment gain on its Vision Fund in the fiscal second quarter but booked another quarterly loss.
- The company said the Vision Fund gain was due to a gain arising from the sale of shares in chipmaker Arm to a subsidiary of SoftBank.
- This offset a decline in the value of companies SoftBank is invested in such as Chinese artificial intelligence firm SenseTime.
SoftBank Founder Masayoshi Son is pictured here in 2019 during an earnings presentation.
Tomohiro Ohsumi | Getty Images
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SoftBank posted an investment gain on its Vision Fund in the fiscal second quarter but booked another quarterly loss.
Here’s how SoftBank did in the September quarter against LSEG estimates:
- Net sales: 1.67 trillion Japanese yen ($11 billion) versus 1.6 trillion yen expected
- Net loss: 931.1 billion yen ($6.2 billion) versus an expected loss of 114.1 billion yen
For the first half of SoftBank’s fiscal year, it posted a 1.41 trillion loss ($9.3 billion). This compares to a 3 trillion yen profit in the same period last year. SoftBank said a weaker yen hit the company since it has a lot of U.S.-dollar denominated liabilities.
SoftBank’s Vision Fund posted an investment gain of 21.3 billion yen, its second straight quarter of gains. The company said this was due to a gain arising from the sale of shares in chip designer Arm to a subsidiary of SoftBank.
This offset a decline in the value of companies SoftBank is invested in, such as Chinese artificial intelligence firm SenseTime.
“The environment is still tough … but we believe we have hit a bottom and are making good moves towards positive figures,” SoftBank Chief Financial Officer Yoshimitsu Goto said on Thursday during an earnings presentation.
WeWork bankcruptcy hit
However, the overall SoftBank Vision Fund segment posted a pre-tax loss of 258.86 billion yen.
SoftBank recorded a loss of 234.4 billion yen for the half-year period related to the investment and financial support provided to WeWork, which filed for Chapter 11 bankruptcy protection in the U.S. this week. SoftBank was one of the biggest backers of the co-working space firm, which tried and failed to go public five years ago.
Critics of SoftBank’s investment strategy point toward WeWork as an example of a lack of discipline, at times, from the Vision Fund. SoftBank’s high-profile founder Masayoshi Son once said WeWork is at the forefront of a “revolution” in the way people work.
Goto addressed the WeWork bankruptcy and said SoftBank should learn lessons from it.
“First of all, I am very story to hear that. As a company we need to accept this reality and also need to learn the lesson from this for our future investment activity,” Goto said.
SoftBank’s flagship tech investment arm had a rough time in the fiscal year that ended in March this year, posting a record loss of around $32 billion. A slump in tech stock prices and the souring of some of SoftBank’s bets in China were to blame.
In the June quarter, the Vision Fund posted its first investment gain in five consecutive quarters, signalling early signs of growth again. This has coincided with recoveries in the prices of technology stocks.
Last year, Son noted the firm would go into “defense” mode, slowing the pace of its investment and being more cautious. In June, Son flagged a shift into “offense” mode, touting his excitement around the potential of artificial intelligence technology.
“We are investing in AI and that’s the main strategy for our company,” Goto said.
Son, who used to lead SoftBank’s earnings presentations with colorful presentations, has not been present for several quarters. But Son has been “devoting himself and involved in the discussion, how and what is going to be the changes in people’s lives from the AI revolution,” Goto said.
The CFO added that SoftBank wants to be a front runner of the AI revolution.
Chip designer Arm went public in the U.S during SoftBank’s fiscal second quarter. The company acquired Arm in 2016 for around $32 billion at the time. The initial public offering of Arm valued the company at over $50 billion.
Arm on Wednesday reported its first set of results since its IPO, posting an annual rise in revenue for the September quarter. However, the semiconductor firm gave guidance for the December quarter that disappointed investors, sending its shares lower in after-hours trade in the U.S.
Correction: The headline of this article has been updated to reflect a $6.2 billion quarterly loss.
SoftBank earnings Q2 FY 2023 (cnbc.com) |
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| To: Glenn Petersen who wrote (6017) | 12/27/2023 11:05:30 AM | | From: Glenn Petersen | | | | SoftBank gets $7.6 billion T-Mobile stake windfall, shares soar
By Sam Nussey
Reuters
December 26, 20239:33 PM CST
Updated 7 hours ago
TOKYO, Dec 27 (Reuters) - SoftBank Group Corp (9984.T) said it would receive shares in telco T-Mobile US (TMUS.O) worth some $7.59 billion at no additional cost, driving the Japanese conglomerate's shares up 5%.
Masayoshi Son's conglomerate said late on Tuesday it had told T-Mobile US to issue 48.75 million shares in common stock to it after conditions set out in an agreement made as part of the merger of SoftBank's U.S. telco Sprint and T-Mobile were met.
The transaction bolsters the listed assets in SoftBank's portfolio, doubling its T-Mobile US stake to 7.64% from 3.75% currently, following the blockbuster listing of chip designer Arm in September.
"This increases the proportion of listed, measurable equity in hand on (SoftBank Group's) balance sheet, and, even better, proportions of marginable equity relative to indebtedness," Macquarie analyst Paul Golding wrote in a client note.
SoftBank's shares were on track for their biggest gain in more than a month. The conglomerate has risen only around 14% year-to-date, compared with an almost 30% rise in the benchmark index (.N225). The group trades at a discount of around 45.5% to the value of its assets, according to Macquarie calculations.
Son has been a leading investor in late stage startups but has suffered a series of reversals including the bankruptcy of office-sharing firm WeWork, which was once the most valuable U.S. startup.
The T-Mobile US transaction bumps SoftBank's internal rate of return (IRR) on its Sprint investment to 25.5%.
Other positives for the company include the recent rally in Arm's shares, which closed on Tuesday around 44% above the initial public offering price.
Reporting by Sam Nussey; Editing by Tom Hogue and Muralikumar Anantharaman
Our Standards: The Thomson Reuters Trust Principles.
SoftBank gets $7.6 billion T-Mobile stake windfall, shares soar | Reuters |
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