Silicon Investor - Softbank Group Corp

[zax] SoftBank $6 billion OpenAI margin loan talks stall finance.yahoo.com [graphic...

zax — 6/10/2026 11:47:07 AM

SoftBank $6 billion OpenAI margin loan talks stall

finance.yahoo.com

An effort by SoftBank Group to secure at least $6 billion via a margin loan collateralized by its OpenAI holdings has hit a wall, Bloomberg reported, citing people familiar with the matter. Other fundraising avenues are being weighed, and a return to the margin loan remains possible down the road, those sources said.

The reasons for the breakdown are unclear. Before the process broke down, approximately $5 billion had already been lined up for the loan, with sources noting uncertainty over whether the pledges were formal or informal. SoftBank declined to comment.

The stalled talks mark a further setback for the fundraising effort. The loan target had previously been trimmed by 40% — from $10 billion down to at least $6 billion — after a number of prospective lenders balked. Among the issues that gave creditors pause was how to put a price tag on a private company like OpenAI that has no public market to set its worth.

OpenAI's announcement Monday that it had confidentially submitted IPO paperwork — with Goldman Sachs Group and Morgan Stanley tapped for a listing potentially arriving as early as autumn — had nudged some prospective lenders toward a more favorable view of the deal. Despite that development, the loan discussions have not moved forward.

Pressing down on all of this is a $40 billion bridge loan SoftBank took on to fund its OpenAI commitments, with repayment due in March 2027. The company has indicated it intends to cover that obligation by drawing on assets it already holds alongside additional financing steps.

Hua Cheng, head of Asia credit research at AllianceBernstein, said the stalled loan is not necessarily cause for alarm on its own. "The margin loan is just one piece of a much larger puzzle, and unless we see a clear deterioration in their ability to raise funds this way, we don't view it as a standalone red flag," Cheng said. "The best-case scenario is an OpenAI IPO this year, with SoftBank offloading part of its stake to pay down debt."

Wednesday's session saw SoftBank shares drop as much as 9.7%, a single-day move that compounded a broader rout totaling more than 20% across the previous five trading days, MarketWatch noted. Until last week, SoftBank had held the distinction of being the highest-valued publicly traded company in Japan.

finance.yahoo.com

[zax] France Reportedly Attracts $108 Billion In Foreign Investment As SoftBank Plans ...

zax — 6/9/2026 11:32:00 AM

France Reportedly Attracts $108 Billion In Foreign Investment As SoftBank Plans Massive AI Data Center Expansion

pulse2.com

France announced a record €93 billion ($108 billion) in foreign investment commitments at the 2026 Choose France summit, with roughly half of the pledged capital tied to a major SoftBank-backed artificial intelligence infrastructure project, according to Reuters. The investments span 71 projects and are expected to create more than 15,600 jobs across the country.

The largest commitment comes from SoftBank, which plans to invest €45 billion to build three AI-focused data centers in the Hauts-de-France region by 2031. According to SoftBank Chairman and CEO Masayoshi Son, the investment could ultimately grow to as much as €75 billion as the company expands its AI infrastructure footprint in Europe.

The three facilities are expected to deliver a combined capacity of 3.1 gigawatts and form a cornerstone of France’s efforts to become a leading European hub for artificial intelligence. The project is part of SoftBank’s broader global AI infrastructure strategy, which includes significant investments in OpenAI and participation in the $500 billion Stargate data center initiative in the United States.

French President Emmanuel Macron highlighted the record investment figures as evidence of the country’s growing appeal to international investors. Annual investment commitments at the Choose France summit more than doubled from €40.8 billion in 2025, exceeding the cumulative total announced across all summits from 2018 through 2025.

A key factor behind France’s attractiveness is its extensive nuclear power infrastructure. With 57 nuclear reactors and a growing electricity surplus, the country is positioning itself as an ideal location for energy-intensive AI computing facilities and large-scale data centers.

SoftBank’s commitment follows discussions between Macron and Son during the French president’s state visit to Tokyo in April. The investment is intended to strengthen Europe’s AI computing capacity and help the region compete more effectively with the United States and China in the race to build advanced AI infrastructure.

Since launching the Choose France initiative in 2018, Macron has used the annual gathering to attract multinational corporations, investors, and technology leaders. The event has now generated investment announcements totaling approximately €180 billion across hundreds of projects.

[zax] * BREAKING * OpenAI files for IPO, the latest in a stream of possible AI me...

zax — 6/8/2026 6:50:14 PM

*** BREAKING ***

OpenAI files for IPO, the latest in a stream of possible AI mega-sales

New York — OpenAI has confidentially filed for an initial public offering, setting it up for what may be the most highly anticipated market debut in recent history and a massive payday for early investors.
The decision comes just after OpenAI’s chief rival Anthropic announced plans to go public and ahead of SpaceX’s planned Friday debut.

The three listings are expected to tally as much as hundreds of billions of dollars in massive sales, both an opportunity for everyday investors to buy into some of the buzziest AI startups and a major test of the market’s appetite for AI firms.

OpenAI said it has not decided on timing yet. And because the filing is confidential, it’s not yet clear how many shares the company plans to sell or at what price.

“It may be a while because there are things we want to do that are likely easier as a private company,” it said in a post on its newsroom page. But the company said the filing “gives us the option to go public sooner if that ends up being best.”

The transition to a public company will give Wall Street a window into OpenAI’s finances as the company pours billions into AI infrastructure and computing resources. Investors dumped tech stocks last week as they questioned whether a recent run-up in those shares had gone too far.

OpenAI was last valued at $852 billion after raising $122 billion in March, but it’s faced pressure to demonstrate it can generate the cash to match that valuation. Sarah Friar, OpenAI’s chief financial officer, raised eyebrows last November when she made comments suggesting the US government should “backstop” the company’s massive spending on chips and data centers, which she later walked back.

OpenAI expanded its monetization options for ChatGPT, its popular chatbot and flagship product, over the past year by launching a cheaper $8 tier and introducing ads. It reportedly expects that cheaper plan to drive its subscriber count up to 122 million this year and projects ads to be its biggest revenue driver by 2030, The Information reported in April.

OpenAI has also sought to prove that it’s more than just ChatGPT over the past year. It’s released a web browser, announced plans to develop consumer hardware products, introduced an AI agent that can code and manage apps on a person’s computer, and developed AI tools and programs for use in government, health and finance.

OpenAI was recently handed a courtroom victory when Elon Musk’s lawsuit against the company was barred by the statute of limitations. The lawsuit, had it gone in Musk’s favor, could have resulted in a major shakeup to OpenAI’s leadership just ahead of the IPO. (Musk’s attorney has said he plans to appeal.)

Still, OpenAI’s path to an IPO hasn’t been entirely smooth. The company is grappling with escalating competition from chief rivals Anthropic and Google, faces lawsuits alleging ChatGPT played a role in shootings and suicides and is combatting general consumer backlash against AI. In 2023, OpenAI almost fell into disarray after CEO Sam Altman was briefly ousted as CEO.

Anthropic’s valuation recently surged past OpenAI’s with a May fundraising round that valued it at $965 billion — highlighting the intense competition between the firms. The two are racing to capture both consumers and businesses, which are spending big on AI tools.

[zax] Looking at today's chart of SFTBY and to me it is clear today's lower open was s...

zax — 6/3/2026 4:06:03 PM

Looking at today's chart of SFTBY and to me it is clear today's lower open was strictly arbitrage with Japan close and profit taking. It swam against the Nasdaq current the entire session.

[zax] >> You mean we should buy it today and hold for the rest of the year? Basically...

zax — 6/1/2026 2:07:03 PM

>> You mean we should buy it today and hold for the rest of the year?

Basically, yes. It was a no-brainer before today and it will be a no-brainer until OpenAI IPO.

Then, you might have to think.

[Elroy] No-brainer investment of the year You mean we should buy it today and hold for ...

Elroy — 6/1/2026 1:33:43 PM

No-brainer investment of the year

You mean we should buy it today and hold for the rest of the year?

Or something else?

[zax] SFTBY $28.57 +20.5% 11:56 AM EDT No-brainer investment of the year

zax — 6/1/2026 12:21:17 PM

[zax] STFBY $14.25, (+6.9%) Amazon is in talks to invest up to $50 billion in OpenAI,...

zax — 1/29/2026 4:28:32 PM

STFBY $14.25, (+6.9%)

Amazon is in talks to invest up to $50 billion in OpenAI, in which SoftBank is a major existing investor. This follows earlier news this week that SoftBank itself was considering an additional $30 billion investment in OpenAI. The recent flurry of major tech investments in the AI space, particularly in OpenAI, is generating significant bullish sentiment for SoftBank and its AI-focused portfolio.

[zax] STFBY $76.06 +5.08% SoftBank Group has sold its stake in Nvidia for $5.8 billio...

zax — 11/11/2025 9:55:32 AM

STFBY $76.06 +5.08%

SoftBank Group has sold its stake in Nvidia for $5.8 billion, as the global tech investor shakes its pockets for cash to plow into its massive bet on OpenAI.

[zax] So sad that Glenn is not with us anymore. I will say that Softbank seems to be ...

zax — 11/10/2025 3:15:36 PM

So sad that Glenn is not with us anymore.

I will say that Softbank seems to be to a very promising investment right about now.

No company's shares stand more to gain more and more directly from the OpenAI IPO, which is said to take place next year.

And the OpenAI IPO will, without a doubt, be the IPO of the century.

SFTBY is trading at a 30 day low right now.

[Glenn Petersen] SoftBank gets $7.6 billion T-Mobile stake windfall, shares soar By Sam Nussey ...

Glenn Petersen — 12/27/2023 11:05:30 AM

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

[Glenn Petersen] SoftBank posts $6.2 billion quarterly loss as WeWork collapse, tech slump drag b...

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
--------------------------------

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)

[Glenn Petersen] WeWork plans to file for bankruptcy as early as next week, source says Reuters ...

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

[Glenn Petersen] Arm climbs 25% in Nasdaq debut after pricing IPO at $51 a share PUBLISHED THU, ...

Glenn Petersen — 9/14/2023 8:08:46 PM

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
-----------------------------------

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)

[Glenn Petersen] That sounds about right, but I will readily admit that I know very little about ...

Glenn Petersen — 9/13/2023 9:09:36 PM

That sounds about right, but I will readily admit that I know very little about chip manufacturing.

The IPO price strikes me as a bit of a stretch.

[Elroy] Is one way to think about Arm as they license subroutines that are used by other...

Elroy — 9/13/2023 8:15:04 PM

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?

[Glenn Petersen] Arm prices IPO at $51 per share, valuing company at over $54 billion PUBLISHED ...

Glenn Petersen — 9/13/2023 5:22:55 PM

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)

[Glenn Petersen] Exclusive: Arm signs up big tech firms for IPO at $50 bln-$55 bln valuation -sou...

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

[Glenn Petersen] The Arm F-1: F-1 (sec.gov) Arm files for Nasdaq listing, as SoftBank aims to s...

Glenn Petersen — 8/21/2023 5:26:24 PM

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)

[Glenn Petersen] SoftBank buys Vision Fund's stake in Arm at valuation of $64 bln-sources By An...

Glenn Petersen — 8/18/2023 2:32:52 PM

SoftBank buys Vision Fund's stake in Arm at valuation of $64 bln-sources

By Anirban Sen
Rueters
August 18, 202311:39 AM CDT
Updated 2 hours ago

NEW YORK, Aug 18 (Reuters) - SoftBank Group Corp (9984.T) has acquired the 25% stake in Arm Ltd it does not directly own from its Vision Fund unit in a deal that values the chip designer at $64 billion, according to people familiar with the matter.

Details of the transaction will be unveiled on Monday when Arm makes public the filing for its blockbuster stock market launch, the sources said, requesting anonymity as these discussions are confidential.

SoftBank is now expected to sell fewer Arm shares in the initial public offering (IPO) and would likely be retaining a stake of as much as 90% in the company, according to the sources, adding that Arm's capital raising from the IPO would be less than the range of $8 billion to $10 billion it was earlier planning.

SoftBank is currently in talks to list Arm at a valuation of $60 billion to $70 billion in the IPO, which is expected to happen in September, Reuters has previously reported. SoftBank, which took Arm private for $32 billion in 2016, sold a 25% stake in the company to Vision Fund 1 (VF1) for $8 billion in 2017.

The deal removes a potential overhang for Arm's stock following the IPO, because VF1 had initially planned to cash out its stake in the stock market over time following the listing, while SoftBank has indicated it will remain a long-term strategic investor.

Reuters was first to report earlier in August that SoftBank was in talks to buy the stake from the Vision Fund. The Wall Street Journal reported the financial terms of the deal earlier on Friday.

The deal also delivers a major victory for VF1's biggest investors, including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala. They nursed losses after many of SoftBank's bets on startups such as workspace provider WeWork Inc (WE.N) and ride-sharing firm Didi Global (92Sy.MU) soured.

Arm's plans to go public come as the U.S. IPO market shows early signs of a recovery after a barren spell that lasted a year and a half. Grocery delivery service Instacart and marketing automation firm Klaviyo Inc are also expected to go public in New York in September, the sources said.

Reporting by Anirban Sen in New York Additional reporting by Milana Vinn in New York and Stephen Nellis in San Francisco Editing by Chizu Nomiyama and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

SoftBank buys Vision Fund's stake in Arm at valuation of $64 bln-sources | Reuters

[Glenn Petersen] SoftBank’s Arm Targets $60 Billion-Plus Value for September IPO -- Chip design ...

Glenn Petersen — 8/2/2023 4:49:11 AM

SoftBank’s Arm Targets $60 Billion-Plus Value for September IPO

-- Chip design firm may raise as much as $10 billion in debut

-- Nvidia, Intel are in discussions to be anchor investors

By Min Jeong Lee, Giles Turner, and Ian King
Bloombeerg
August 2, 2023 at 12:45 AM EDT

SoftBank Group Corp.’s semiconductor unit Arm Ltd. is targeting an initial public offering at a valuation of between $60 billion and $70 billion as soon as September, a sign of bullish interest in artificial-intelligence chips, according to people familiar with the matter.

The roadshow is scheduled to start the first week of September with pricing for the IPO the following week, said one of the people, asking not to be named because the talks are private. The latest target for Arm’s valuation underscores a shift in market mood in favor of technologies linked to generative AI and chips. Earlier this year, bankers were pitching a range of valuations for the chip designer from $30 billion to $70 billion, Bloomberg News has reported.

SoftBank, led by Masayoshi Son, and Arm Chief Executive Officer Rene Haas long considered the bottom of that range too low. Arm executives may still be gunning for a valuation of as high as $80 billion, but the odds of achieving such a target are uncertain, one of the people said. The chip company is looking to raise as much as $10 billion in the IPO, Bloomberg News has reported.

Arm has “had a hugely important but behind-the-scenes and not-very-well-understood role for a very long time,” said Bob O’Donnell, president of TECHnalysis Research. “There’s this raised awareness now of what Arm does and the role that it plays.”

Rene Haas, chief executive officer of Arm.Photographer: David Paul Morris/Bloomberg
-----------------------------------------

SoftBank and Arm declined to comment.

Arm made a confidential filing for a US listing in April. A handful of big industry names, including Nvidia Corp. and Intel Corp., have been engaged in preliminary talks to become anchor investors in the IPO, which could be the year’s biggest market debut.

Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc and Mizuho Financial Group Inc. were named as IPO banks in the filing, Bloomberg News has reported.

While the Cambridge, UK-based company’s technology is used in almost every smartphone on the planet, its place in the industry has long been obscure. Arm sells the blueprints needed to design microprocessors, and licenses technology known as instruction sets that dictate how software programs communicate with those chips. The power efficiency of Arm’s technology helped make it ubiquitous on phones, where battery life is critical.

Haas, who took over as CEO last year, is now working to expand beyond the smartphone market, which has stagnated in recent years. He’s targeting more advanced computing, particularly the chips for data centers for cloud computing and artificial intelligence applications.

Processors for that market are among the most expensive — and profitable — in the industry. Amazon.com Inc. has adopted Arm-based chips for its Amazon Web Services because it says they are more efficient both in terms of energy and economics. They are used by 40,000 AWS customers.

Estimates for Arm’s value have fluctuated wildly in tandem with chip stocks since SoftBank acquired the company for $32 billion in 2016, de-listing it from the London Stock Exchange. SoftBank founder Son has regularly talked up the potential for Arm’s future growth and dominance in chip IP. In February last year, Son said he wants Arm’s debut to be “the biggest” in the history of the semiconductor industry.

A successful Arm IPO would mark a rare victory for SoftBank, which struggled after an ill-fated foray into startup investing. The company’s Vision Fund arm lost 6.9 trillion yen ($48 billion) in the last two fiscal years as the value of its holdings tumbled.

— With Edwin Chan

SoftBank’s Arm Targets $60 Billion-Plus Value for September IPO - Bloomberg (archive.ph)

[Glenn Petersen] Nvidia in talks to be an anchor investor in Arm IPO World’s most valuable semic...

Glenn Petersen — 7/12/2023 5:18:22 AM

Nvidia in talks to be an anchor investor in Arm IPO

World’s most valuable semiconductor group discusses acquiring stake in SoftBank-owned chip designer ahead of New York listing

Tabby Kinder in San Francisco, Qianer Liu in Hong Kong, Nicholas Megaw in New York, Kana Inagaki in Tokyo and Tim Bradshaw in London
Financial Times

3 HOURS AGO

Chip designer Arm is in talks to bring in Nvidia as an anchor investor, while the SoftBank-owned company presses ahead with plans for a New York listing as soon as September, several people briefed on the talks said.

Nvidia, the world’s most valuable semiconductor company, was forced last year to abandon its planned $66bn acquisition of Arm after the deal was challenged by regulators.

The Silicon Valley-based chipmaker is one of several existing Arm partners, including Intel, that the UK-based company is hoping will take a long-term stake at the initial public offering stage, according to the people.

The prospective investors are still negotiating with Arm over its valuation. One person familiar with the discussions said Nvidia wanted to come in at a share price that would put Arm’s total value at $35bn to $40bn, while Arm wants to be closer to $80bn.

The aim of bringing in large anchor investors as Arm launches an IPO in New York would be to help to support the stock as SoftBank, which bought Arm for £24bn ($32bn) in 2016, sells down its stake.

Many private tech companies and their advisers are watching closely to see if Arm can succeed in launching its IPO in 2023 after a year-long slump in new listings.

Securing the advance support of a few anchor investors is a popular tactic during difficult IPO markets, serving as a way to ensure demand and reassure other potential investors.

Arm and Nvidia declined to comment. A person close to the situation said the talks had not been concluded and might not lead to an investment.

Arm is expected to be the most valuable company to go public in the US since automaker Rivian, which listed with an initial market capitalisation of $70bn in late 2021.

It is widely considered to be a less risky prospect than many IPO candidates given its previous record as a public company.

People close to SoftBank said its founder Masayoshi Son has been personally involved in seeking anchor investors for Arm. Son has been focusing on expanding the chip designer’s revenue ahead of its IPO. SoftBank declined to comment.

Arm and Nvidia have contacted regulators in the US to smooth over any potential concerns about what is likely to be a small minority investment, in the low hundreds of millions of dollars, according to people close to the discussions.

When Nvidia first announced plans to take over Arm in September 2020, competition authorities in the US and Europe objected. They said the deal might restrict rivals’ access to Arm’s intellectual property, which can be found in the vast majority of smartphones and a growing portion of the automotive market, as well as give Nvidia access to competitively sensitive information.

Nvidia is already an Arm customer but its talks to invest in the company point to bigger ambitions to expand from its core business in “graphics processing units” — dedicated chips for accelerating specialised tasks, including 3D rendering and training artificial intelligence — into the “central processing units” that handle most other computing functions.

One person familiar with the plans said Arm was keen to bring in Nvidia in its bid as a way to position AI as central to the UK group’s growth plans. “AI will be every third word in the offering document,” the person said. “Nvidia is so important as its involvement implies AI.”

The move would bring Nvidia into closer competition with Intel, whose CPUs have long dominated the PC and data centre markets.

Nvidia, which became the first chipmaker to hit a $1tn valuation in May, recently produced its first CPU using Arm’s designs as part of a so-called superchip, dubbed Grace Hopper and designed for artificial intelligence and high-performance computing.

Global listing volumes plummeted last year as investors were put off by falling stock prices, rising market volatility and the uncertain economic outlook. However, activity has begun to pick up in recent weeks, thanks in part to a broader upswing in stock prices led by Nvidia.\

Additional reporting by Richard Waters

Nvidia in talks to be an anchor investor in Arm IPO | Financial Times (archive.ph)
```

[Glenn Petersen] Masayoshi Son says SoftBank ready to go on ‘counteroffensive’ Billionaire chief...

Glenn Petersen — 6/21/2023 5:12:46 AM

Masayoshi Son says SoftBank ready to go on ‘counteroffensive’

Billionaire chief talks up AI and reveals he had breakdown in October where he questioned his achievements as an entrepreneur

Kana Inagaki in Tokyo
2 HOURS AGO
Financial Times

SoftBank chief Masayoshi Son has said the company will go on the “counteroffensive” after nearly three years of asset sales and hoarding cash to resume the technology group’s investments in artificial intelligence.

In his first major presentation to investors since November, the 65-year-old founder of the Japanese conglomerate said he would devote the rest of his life to being “an architect for the future of humanity”.

“We have done enough being on the defensive,” Son said on Wednesday at the company’s annual shareholders’ meeting in Tokyo. “I feel that the timing for us to go on the counteroffensive is soon. I’m very excited.”

Following heavy losses incurred by SoftBank’s Vision Funds in recent years, the tech conglomerate halted new investments and used almost all of its shares in Chinese ecommerce group Alibaba for financing. As a result, the group is now sitting on more than ¥5tn ($35bn) in cash.

“I regret big mistakes,” Son said in response to a shareholder’s question on whether the Vision Funds’ investments were actually focused on artificial intelligence.

“But still, we made investments in roughly 500 companies...and I think at least I have found more than several that are going to be big successes out of the 500. I think that’s enough.”

In May, SoftBank’s chief financial officer Yoshimitsu Goto said the company would not miss opportunities to invest in new technology such as ChatGPT but cautioned that it was not ready to accelerate its deal activity following record annual investment losses of ¥5.3tn. Ahead of Son’s presentation, shares in SoftBank rose as much as 4 per cent. Investor sentiment has improved ahead of the blockbuster listing of its UK chip designer Arm in New York.

During the AGM, Son revealed he had a crisis in October where he broke down in tears for a few days and questioned how much he had achieved as an entrepreneur.

“I realised that what I really wanted to become was an architect, to design the future of humanity,” Son said. “I want to achieve several [of my inventions] one by one and Arm will provide the key. By using Arm’s position and combining it with my ideas, there will be an amazing opportunity.”

The SoftBank boss warned that companies would fall behind if they shunned the use of generative AI but also called for regulations to ensure the technology would not be misused.

“There is a risk of scarier consequences than the atomic bomb if [AI] is misused by the wrong people .?.?. so regulations should be debated and introduced,” he said.

Masayoshi Son says SoftBank ready to go on ‘counteroffensive’ | Financial Times (archive.ph)

[Glenn Petersen] Arm in talks with big clients about investing in IPO -sources Reuters June 13, ...

Glenn Petersen — 6/14/2023 6:21:30 AM

Arm in talks with big clients about investing in IPO -sources

Reuters
June 13, 20233:05 PM CDT Updated 12 hours ago

June 12 (Reuters) - SoftBank Group Corp's (9984.T) Arm is in talks with some of its biggest customers and end users about bringing on one or more anchor investors in the chip designer's initial public offering (IPO), two sources familiar with the matter said.

Arm is talking to at least ten companies, including Intel Corp (INTC.O), Alphabet Inc (GOOGL.O), Apple Inc. (AAPL.O), Microsoft Corp. (MSFT.O), TSMC (2330.TW), and Samsung Electronics Co Ltd. (005930.KS), about their potential participation in the IPO, one of the sources said.

The talks are preliminary and any decision about an anchor investment in Arm's IPO won't come till August, the source added. The investment would not come with any board seat or control, according to the source.

Arm plans to sell its shares on Nasdaq later this year, seeking to raise $8 billion-$10 billion, Reuters reported earlier in April.

Arm's designs are used to manufacture chips made by most of the world's major semiconductor companies, including Intel, AMD (AMD.O), Nvidia (NVDA.O) and Qualcomm (QCOM.O). It was not immediately clear what impact any IPO investment by one or more of those companies would have on Arm's commercial relationships.

The chip designer had filed with regulators confidentially for a U.S. stock market listing in April, setting the stage for this year's largest IPO.

Arm and Intel declined a Reuters request for comment. Bloomberg News first reported on the cornerstone investment deliberations.

Alphabet, Apple, Microsoft, TSMC and Samsung didn't immediately respond to requests for comment.

Reporting by Anirban Sen and Echo Wang in New York and Yana Gaur in Bengaluru; Editing by Rashmi Aich, Dhanya Ann Thoppil and Edward Tobin

Arm in talks with big clients about investing in IPO -sources | Reuters

[Glenn Petersen] I think that Softbank invested $355 million into Zume, Fallen Pizza Startup Zum...

Glenn Petersen — 6/4/2023 6:04:42 AM

I think that Softbank invested $355 million into Zume,

Fallen Pizza Startup Zume Shuts Down After Raising Millions

-- The company pulled in about $450 million from SoftBank, others

-- Baking pizza with robots in trucks was a technical challenge

A robot places a pizza into an oven at Zume Pizza in Mountain View, California, in 2016.Photographer: Marcio Jose Sanchez/AP Photo
----------------------------
By Sarah McBride
Bloomberg
June 3, 2023, 2:10 AM UTC

Zume Inc., a one-time robot pizza business that came to represent the excesses of pre-pandemic venture investing, has shut operations, two people familiar with the matter said.

The company had raised about $450 million from SoftBank Group Corp.’s Vision Fund and others. It has retained Sherwood Partners, a restructuring firm, to sell its assets, one of the people said. The Information first reported the shuttering.

Zume did not respond to requests for comment.

Founded in 2015, the company was one of many attempting to use robots to make pizza. The concept never took off, and the technology was plagued by technical challenges, such as keeping melting cheese from sliding off while the pizzas baked in moving trucks.

In January 2020, the company cut over half its employees and switched to compostable packaging, based on the know-how of a southern California company it had acquired, Pivot Packaging.

Fallen Pizza Startup Zume Shuts Down After Raising Millions - Bloomberg (archive.ph)

[Glenn Petersen] SoftBank Vision Fund Loses $32 Billion on Weak Startup Values By Min Jeong Lee...

Glenn Petersen — 5/11/2023 5:41:09 AM

SoftBank Vision Fund Loses $32 Billion on Weak Startup Values

By Min Jeong Lee and Takahiko Hyuga
Bloomberg
May 11, 2023, 6:05 AM UTC

SoftBank Group Corp.’s Vision Fund unit reported a record annual loss after a recent global stock market rebound failed to outweigh three straight quarters of hefty writedowns.

The Vision Fund unit lost ¥4.3 trillion ($32 billion) in the year ended March, compared with a ¥2.6 trillion loss the previous year. It was the segment’s biggest loss since founder Masayoshi Son launched his first Saudi and Abu Dhabi-backed fund in 2017.

The Nasdaq 100 index, a benchmark for tech stock performance, rallied 20% during the March quarter, lifting share prices for some of SoftBank’s biggest investments. Coupang Inc. gained around 9% and Didi Global Inc. about 20% during the period. But most of the Vision Fund portfolio firms are still reeling from the brunt of last year’s stock market collapse.

Many of the privately-held companies that SoftBank’s invested in are not yet profitable, while the IPO market remains lackluster. “I remain cautious about the rest of the year, and private companies could continue to drag down valuations,” said Victor Galliano, an independent analyst who publishes on Smartkarma.

The billionaire Son has said the company will remain in defense mode until financial markets recover. SoftBank is in the process of divesting a number of its assets to clean up its balance sheet and appease worried investors, while promoting the highly-anticipated initial public offering of Arm Ltd.

Bankers have pitched a valuation of between $30 billion to $70 billion for Arm’s listing, a wide range reflecting the challenges of valuing the firm against a backdrop of volatile semiconductor equity prices.

“The Arm story is key and valuation is important, but that may be more at the mercy of markets than SoftBank would like,” said Mio Kato, an analyst from LightStream Research who publishes on Smartkarma.

SoftBank offloaded an additional $7.3 billion in Alibaba shares this year through prepaid forward contracts, according to a Bloomberg analysis of regulatory filings. This may have reduced SoftBank’s Alibaba stock to around 3.8%. Last month, the Japanese conglomerate said it is selling its early-stage venture capital arm SoftBank Ventures Asia Corp. to an entity led by Taizo Son, the younger brother of Son. Terms of the deal weren’t disclosed.

The sale of the startup incubator could ease SoftBank’s financing burden, while offloading Alibaba shares in the wake of the e-commerce leader’s plans to split into six parts would help maximize SoftBank’s divestment income, Bloomberg Intelligence analyst Marvin Lo wrote in a note last month.

SoftBank is nearing a deal to sell Fortress Investment Group to Mubadala for as much as $3 billion, the Financial Times reported, citing unidentified people briefed on the matter.

That would help SoftBank’s share price, Galliano said. “The focus for now has to be realizing investments where possible and reducing leverage, and we look forward to perhaps more disclosure on Masa’s debts with the group.”

Investors are not yet declaring the bottom for the venture capital sector, given the recent collapses of Silicon Valley Bank and First Republic Bank, which provided funding support to the startup ecosystem.

“Markets remain volatile and the near-term outlook for Vision Fund remains murky,” said Kirk Boodry, an analyst with Astris Advisory.
\
SoftBank Vision Fund Loses $32 Billion on Weak Startup Values - Bloomberg (archive.ph)

[Glenn Petersen] SoftBank's Arm registers for blockbuster U.S. IPO By Anirban Sen and Echo Wan...

Glenn Petersen — 4/29/2023 2:30:33 PM

SoftBank's Arm registers for blockbuster U.S. IPO

By Anirban Sen and Echo Wang
Reuters
April 29, 2023

NEW YORK, April 29 (Reuters) - SoftBank Group Corp's (9984.T) chip maker Arm Ltd has filed with regulators confidentially for a U.S. stock market listing, Arm said on Saturday, setting the stage for this year's largest initial public offering.

The IPO registration shows that Softbank is pressing ahead with the blockbuster offering despite adverse market conditions, after saying in March that it planned to list Arm in the U.S. stock market.

U.S. IPOs, excluding listings for special purpose acquisition companies, are down about 22% to a total of just $2.35 billion year-to-date, according to Dealogic, as stock market volatility and economic uncertainty put many IPO hopefuls off.

Arm plans to sell its shares on Nasdaq later this year, seeking to raise between $8 billion and $10 billion, people familiar with the matter said. In a statement, which confirmed an earlier Reuters report on the planned IPO, Arm said the size and price range for the offering has not yet been determined.

The sources cautioned that the exact timing and size of the IPO are subject to market conditions and asked not to be identified because the matter is confidential.

SoftBank and Arm declined to comment.

There are signs that the IPO market is beginning to thaw. Johnson & Johnson Inc (JNJ.N) is preparing to list its consumer health business Kenvue Inc (KVUE.N) in New York next week, hoping to raise about $3.5 billion.

SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to Nvidia Corp (NVDA.O) for $40 billion collapsed last year because of objections from U.S. and European antitrust regulators.

Since then, Arm's business has fared better than the broader chip industry thanks to its focus on data center servers and personal computers that generate higher royalty payments. The company said sales were up 28% in its most recent quarter.

Arm's IPO is expected to boost the fortunes of SoftBank, which is battling to turn around its giant Vision Fund, which has been hit by losses due to the declining valuations of many of its holdings in technology startups.

Earlier this year, Arm rebuffed a campaign from the British government to list its shares in London and said it would pursue a flotation on a U.S. exchange.

Arm's IPO preparations are being led by Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), Barclays (BARC.L) and Mizuho Financial Group (8411.T).

Reporting by Anirban Sen and Echo Wang in New York; additional reporting by Stephen Nellis in San Francisco; editing by Jonathan Oatis

[Glenn Petersen] SoftBank moves to sell down most of its Alibaba stake Japanese investor makes $7...

Glenn Petersen — 4/12/2023 7:55:24 PM

SoftBank moves to sell down most of its Alibaba stake
Japanese investor makes $7.2bn from forward sales of shares in Chinese ecommerce group as lucrative
Ryan McMorrow in Beijing, Eleanor Olcott in Hong Kong and Kana Inagaki in Tokyo
AN HOUR AGO
Financial Times

SoftBank has moved to sell almost all of its remaining shareholding in Alibaba, limiting its exposure to China and raising cash as the market downturn pummels the value of its technology investments.

The Japanese group, led by billionaire founder Masayoshi Son, has sold about $7.2bn worth of Alibaba shares this year through prepaid forward contracts, after a record $29bn selldown last year.

The forward sales, revealed through a Financial Times analysis of regulatory filings sent by post to the US Securities and Exchange Commission, will eventually cut SoftBank’s stake in the $262bn Chinese ecommerce group to just 3.8 per cent.

The contracts allow SoftBank the option to buy back the shares, but the group has settled previous deals by handing over the stock. The Japanese investor once owned as much as 34 per cent of Alibaba.

SoftBank’s selldown comes at a pivotal moment for the Japanese group, which is planning a blockbuster listing of UK chip designer Arm as it seeks to recover from a spate of failed investments and unprecedented losses. For Alibaba, it will mean the retreat of a longtime backer just as the Chinese group attempts to reinvent itself by splitting into six entities.

SoftBank’s selling spree has come as the Chinese group’s shares have plumbed six-year lows, a disappointing conclusion to one of the most successful technology investments ever made. Son paid $20mn for the bulk of SoftBank’s holding in the fledgling Chinese group more than two decades ago after meeting founder Jack Ma.

“He had no business plan and zero revenue, employees maybe 35 [or] 40,” Son later said on Bloomberg TV. “But his eyes [were] very strong, strong eyes, strong shining eyes. I could tell from the way he talked, the way he looked [at things], he has a charisma, he has a leadership.”

Ma’s penchant for speaking his mind turned into a liability in October 2020 when he criticised China’s state-owned banks at a financial summit in Shanghai. Beijing then suspended the blockbuster IPO of Alibaba’s sister company Ant, as President Xi Jinping launched a campaign to rein in the country’s tech groups.

The crackdown has cut Alibaba’s share price by 70 per cent, leaving SoftBank selling most of its holding at prices on a par with where Alibaba opened for trading in New York eight years ago.

Over the past 14 months, SoftBank reaped, on average, $92 a share from the forward sales of 389mn Alibaba shares, far below the company’s all-time high of $317 a share, according to filings supplied by data provider The Washington Service.

They show SoftBank most recently raised about $4.5bn in February from the forward sales of 46mn shares, coming after the sale of 30mn shares for $2.7bn in late December. SoftBank said the latter sale was not fully completed by the end of December and would be accounted for in its yet to be released financial report for the quarter that ended on March 31.

SoftBank declined to comment on the regulatory filings. But it said the Alibaba transactions reflected its shift to “a defensive mode” to address a more uncertain business environment. “We are bolstering our financial stability by increasing our liquidity on hand by raising cash,” it said.

It added that the additional amount it raised from Alibaba shares would be revealed when it reports its fourth-quarter results in May.

With forward sales, SoftBank generally lends its Alibaba shares to a broker, which sells the shares into the market over a period of days or weeks. The broker takes a fee before returning the proceeds to the Japanese group.

When the contracts come due, SoftBank can either fully relinquish its claim to the shares or pay the broker the market price to repurchase the shares on its behalf.

The filings show most of the recent deals were handled by Barclays, Mizuho Securities and SMBC Nikko Securities, which would earn less than 1 per cent of the proceeds as fees, according to a banker familiar with the deals. Their structure allows SoftBank to delay paying capital gains tax until settlement.

At the end of February, SoftBank had only 98mn shares of Alibaba left to sell, according to the FT’s estimates. On March 30, the group shifted how it held another 22.3mn shares “in light of the potential to use them for financing in the future,” SoftBank said in a statement.

While SoftBank has said that the monetisation of Alibaba shares was to shore up its finances, some investors have seen the move as a desperate means to lift its earnings figures, with analysts projecting a second consecutive year of heavy losses.

SoftBank has put cash harvested from the Alibaba selldown into its Vision Fund II, paid off debt and repurchased shares. Billions are also piling up in cash on its balance sheet, which stood at ¥5.8tn ($43bn) at the end of December, leading to a growing internal debate over how to spend the money, according to a person close to SoftBank.

SoftBank said it would continue to be selective with its investments, citing uncertain market conditions.

“There are divergent views internally on whether we should continue to be a bit more defensive?.?.?.?or whether now is the time to get back into investing,” said the person close to SoftBank. “[Executives] are coming around more and more to opening the spigot again.”

SoftBank moves to sell down most of its Alibaba stake | Financial Times (archive.ph)

[Julius Wong] Softbank's stock rose after Alibaba revealed plans to split up into six units M...

Julius Wong — 3/29/2023 7:28:21 AM

Softbank's stock rose after Alibaba revealed plans to split up into six units

Mar. 29, 2023 5:46 AM ET
SoftBank Group Corp. (SFTBY), SFTBF, BABA
By: Niloofer Shaikh, SA News Editor

Carl Court

Softbank Group ( OTCPK:SFTBY) ( OTCPK:SFTBF) soared on Wednesday after Chinese e-commerce Alibaba (NYSE: BABA) announced a major restructuring plan - Reuters reported Wednesday.

With 13.7% stake, Alibaba is a key portfolio company of Softbank.

The Tokyo-based company's stock rose about 6.2% in intraday trading on Wednesday, the largest intraday gain since October.

E-commerce giant Alibaba ( BABA) announced on Tuesday to split into six units and explore fundraising or IPOs for most of them.

This initiative will allow the company's main divisions: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group to operate with far greater autonomy, laying the groundwork for future spinoffs and market debuts.

Following the announcement of the split, Alibaba ( BABA) shares rose 14%, bringing the company's market value to around $255B.

[Glenn Petersen] SoftBank's Arm aims to raise at least $8 billion in U.S. IPO, sources say By E...

Glenn Petersen — 3/6/2023 5:10:21 AM

SoftBank's Arm aims to raise at least $8 billion in U.S. IPO, sources say

By Echo Wang and Anirban Sen
Reuters
March 5, 2023

NEW YORK, March 5 (Reuters) - Arm Ltd, the British chip designer owned by Japan's SoftBank Group Corp (9984.T), is likely to aim to raise at least $8 billion from what is expected to be a blockbuster U.S. stock market launch this year, people familiar with the matter said on Sunday.

Arm is expected to confidentially submit paperwork for its initial public offering in late April, the sources said, speaking on condition of anonymity because the discussions are confidential. The listing is expected to happen later this year and the exact timing will be determined by market conditions, the sources added.

SoftBank has picked four investment banks to lead what is expected to be the most high-profile stock market flotation in recent years. Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), Barclays (BARC.L) and Mizuho Financial Group (8411.T) are expected to be the lead underwriters for the deal, the sources said, adding that no bank has been picked for the much-coveted "lead left" position yet.

The Australian Financial Review reported on the lead banks earlier on Sunday.

The preparations for the IPO are expected to be kick-started in the U.S. in the coming days, the sources said. The valuation range has not yet been finalized but Cambridge, England-based Arm is hoping to be valued at more than $50 billion during its share sale, the sources said.

Barclays, JPMorgan and SoftBank did not immediately respond to requests for comment. Arm, Goldman Sachs and Mizuho declined to comment.

A successful listing for Arm this year would provide a boost to the IPO market, which has been largely frozen since Russia's invasion of Ukraine in February 2022 triggered market volatility and a huge sell-off in tech stocks.

The IPO market briefly flickered back to life last month as a number of companies including solar tech firm Nextracker Inc (NXT.O) and Chinese sensor maker Hesai Group (HSAI.O) listed their shares on U.S. stock exchanges, but investors still remain wary of betting on new stocks.

IPO advisors are not expecting a full-blown recovery in capital markets until the latter half of this year. read more

Arm said last week it would pursue a U.S.-only listing this year, dashing the British government's hopes that the tech giant would return to the London stock market. read more

SoftBank has been pursuing a listing for Arm since its deal to sell the chip designer to Nvidia Corp (NVDA.O) for $40 billion collapsed last year because of objections from U.S. and European antitrust regulators.

Reporting by Echo Wang and Anirban Sen in New York; Editing by Will Dunham

Our Standards: The Thomson Reuters Trust Principles.

SoftBank's Arm aims to raise at least $8 billion in U.S. IPO, sources say | Reuters

[Glenn Petersen] Arm CEO says form fully committed to a market listing this year By Stephen Nel...

Glenn Petersen — 2/8/2023 4:28:38 AM

Arm CEO says form fully committed to a market listing this year

By Stephen Nellis
Reuters
February 7, 20231:56 PM CST

SAN FRANCISCO, Feb 7 (Reuters) - The chief executive of Softbank-owned British chip technology firm Arm told Reuters on Tuesday that the company is committed to a stock market float this year.

"The plans are actually fairly well developed and underway now," Rene Haas said in an interview after Arm's corporate parent reported its fourth straight quarter of losses. "We're doing everything we can and are committed to have it happen this year."

Arm's fiscal third quarter sales were up 28% to $746 million, one of the few growth areas for Softbank (9984.T) as its vast portfolio of early stage technology startup investments weighed on its results.

Arm is the world's biggest supplier of chip design elements used in smartphones, selling intellectual property to companies like Apple Inc (AAPL.O) and Qualcomm Inc (QCOM.O). Arm makes money off upfront licensing deals with such companies and then a royalty on each chip sold using its technology.

Part of Haas' strategy has been to speed up Arm's push into other markets such as data center servers, where companies like Amazon.com Inc's (AMZN.O) cloud unit are using Arm-based chips.

Those efforts helped boost upfront license revenue 65% to $300 million as Arm signed new deals in cloud computing and other segments, though company executives conceded that some of the growth was driven by multiple deals landing at once.

Arm said per-chip royalties, which are steadier than its deal-making business, were up 12% to $446 million in the quarter. That growth came amid a slowdown in the smartphone business that dragged down results at Apple and Qualcomm.

Haas said Arm is "not immune" to the softening smartphone market but that the company has licensed more intellectual property into each chip than in the past. With the most advanced phone chips now using 10 to 12 computing cores along with the newest version of Arm's computing architecture, he said that translates into higher royalties for each chip sold.

"The diversification that we've done and, in core markets, just having more technology in the chips means that we've been able to withstand the downturn better than most," Haas said.

Additional reporting by Muvija M and Paul Sandle; Editing by Alistair Smout and Bill Berkrot
Our Standards: The Thomson Reuters Trust Principles.

Arm CEO says firm fully committed to a market listing this year | Reuter

[Glenn Petersen] SoftBank’s Vision Fund posts fourth straight quarter of losses as tech slump hit...

Glenn Petersen — 2/7/2023 5:13:22 AM

SoftBank’s Vision Fund posts fourth straight quarter of losses as tech slump hits Japanese giant

PUBLISHED TUE, FEB 7 20233:14 AM EST
UPDATED AN HOUR AGO
Arjun Kharpal @ARJUNKHARPAL
CNBC.com

KEY POINTS

-- SoftBank’s flagship investment arm, the Vision Fund, posted its fourth straight quarterly loss on Tuesday as a slump in technology valuations continues to hit the Japanese giant.

-- Some of SoftBank’s worst-performing investments were Chinese artificial intelligence firm SenseTime and Indonesian technology group GoTo, both of which have seen shares plummet around 60% over the last year.

-- Masayoshi Son, SoftBank’s outspoken founder and the mastermind behind the Vision Fund, said in May that the company would go into “defense” mode and be more “conservative” with the pace of investments.

SoftBank’s flagship investment arm the Vision Fund posted its fourth straight quarterly loss on Tuesday as a slump in technology valuations continues to hit the Japanese giant.

The Vision Fund segment posted a pre-tax loss of 660 billion Japanese yen ($5 billion) for the December quarter. SoftBank’s Vision Fund’s loss on investments came in at 730.35 billion yen over the three-month period.

SoftBank Group overall reported a net loss of 783.4 billion yen, sinking back to a quarterly loss after posting a profit in the July-to-September quarter.

It has been a tough time for SoftBank whose Vision Fund has stakes in a range of tech companies, from start-ups to listed behemoths, amid a massive drop in technology valuations over the past year.

SoftBank said some of the major losses in the last quarter were due to an “overall decrease in the fair value of portfolio companies, mainly reflecting markdowns of weaker-performing companies and share price declines in market comparable companies.”

Some of SoftBank’s worst-performing investments include Chinese artificial intelligence firm SenseTime, which is down 57% over the past year, and Indonesian technology group GoTo, which has seen its shares plummet over 65%.

Masayoshi Son, SoftBank’s outspoken founder and the mastermind behind the Vision Fund, said in May that the company would go into “defense” mode and be more “conservative” with the pace of investments after the unit posted a record 3.5 trillion Japanese yen loss for last fiscal year.

SoftBank said that it made just $2.76 billion in new and follow-on investments in the nine months to Dec. 31, a “significant reduction” from $39.24 billion in 2021.

Over the past year, SoftBank has been exiting some of its highest-profile investments to raise cash. In August, it said it had sold its remaining stake in U.S. ride-hailing giant Uber. And last year, it sold some of its Alibaba shares via a derivative called a forward contract. Son made his fortune with an early investment in Alibaba more than two decades ago.

Son, who is known for his colourful investor presentations, was not present on the company’s earnings call Tuesday.

The SoftBank CEO is currently focused on trying to pull off a public listing of ARM, the British chip designer it bought in 2016. The company’s finance chief Yoshimitsu Goto said on Tuesday that the listing of ARM will take place this year.

“Preparation is underway and we will see how the market condition goes,” Goto said.

SoftBank Vision Fund posts another quarterly loss as tech slump bites (cnbc.com)

[Glenn Petersen] Masayoshi Son owes $4.7bn to SoftBank following tech rout Market crash also wi...

Glenn Petersen — 11/18/2022 6:43:26 AM

Masayoshi Son owes $4.7bn to SoftBank following tech rout

Market crash also wipes out value of Japanese founder’s stake in second Vision Fund 0

Robert Smith in London and Kana Inagaki and Leo Lewis in Tokyo
Financial Times
YESTERDAY

Masayoshi Son personally owes SoftBank close to $5bn because of growing losses on the Japanese conglomerate’s technology bets, which have also rendered the value of his stake in the group’s second Vision Fund worthless.

The billionaire’s ballooning personal liabilities, discovered through a Financial Times analysis of SoftBank’s recent filings, comes as the world’s biggest tech investor was hammered by plunging tech stocks and valuations in private companies over the past year.

The 65-year-old chief executive and founder of SoftBank last week said he would step back from running day-to-day operations at the group. His main focus, he said, would be on the company’s British chip subsidiary Arm, after the technology conglomerate posted quarterly investment losses of $10bn.

The widening losses in SoftBank’s various investment vehicles have also added billions of dollars to the tab that Son owes the group in relation to its technology bets. This is because SoftBank fronted him the money to invest in its technology-related funds, which he is under no obligation to repay for many years.

The value of Son’s 17.25 per cent stake in SoftBank’s $56bn second Vision Fund was also wiped out entirely by the end of September, having been valued at $682mn during the previous quarter. His stake in the investment vehicle climbed as high as $2.8bn at the end of 2021, when heady valuations for start-ups enabled SoftBank to sell shares in public listings of portfolio companies such as WeWork and AutoStore.

SoftBank has not yet collected $2.8bn that Son owes in relation to his stake in the fund. Previously, SoftBank netted off the value of his equity from the amount he owed the group, meaning at the end of 2021 this stood at just $4mn.

Son also owes SoftBank $669mn under a similar arrangement on its Latin American fund, which has backed start-ups across the continent, although this is reduced to $252mn when his equity value in the fund is taken into account.

The total amount the Japanese executive owes his company is now at $4.7bn, when losses in the group’s shortlived internal hedge fund SB Northstar are also taken into account, SoftBank confirmed to the FT.

Son’s growing liabilities to his own company have emerged as SoftBank shareholders have questioned its decision to sharply accelerate the pace of share buybacks in recent weeks, which pushed its share price to a 12-month high earlier this month and left its stock buoyant despite the heavy losses at its Vision Funds.

Son has to personally cover a third of the losses in Northstar, which earned notoriety for carrying out the “Nasdaq whale” trades in US technology stocks in 2020. The stock-trading unit’s total investment losses grew to nearly $6bn at the end of September as the group continued to liquidate its investments.

If the internal hedge fund’s outsized derivative bets had paid off, Son would have reaped a third of the gains.

Similarly, if Vision Fund 2’s investments in private technology companies had been profitable, the SoftBank founder stood to gain handsomely without putting up any upfront capital. Instead the arrangement has wiped billions of dollars off the net worth of one of Japan’s richest men.

In contrast to SoftBank’s first $100bn Vision Fund, which secured tens of billions of dollars from Middle Eastern sovereign wealth funds, its second major technology investment vehicle has no outside backers. The only investors are SoftBank and Son, with a slug of the company’s stake held as preference shares that rank ahead of its founder.

The second Vision Fund was one of a number of blue-chip investors that wrote off its stake in collapsed cryptocurrency exchange FTX last week, with SoftBank’s total losses standing at about $100mn.

In both Vision Fund 2 and the Latin America Fund, Son has pledged both his stake in the funds and a portion of his SoftBank stake as collateral for the amount he owes the company. On top of this, the billionaire founder has also provided a personal guarantee in relation to the unpaid bill.

Masayoshi Son owes $4.7bn to SoftBank following tech rout | Financial Times

[Agentsmith_2000] What prospects does Softbank have in the near term? Seems like its everyones fav...

Agentsmith_2000 — 10/13/2022 8:35:40 PM

What prospects does Softbank have in the near term? Seems like its everyones favorite short sell lately. Has the image of a large Tech fund in constant state of outflows. Doesnt help to see employee/talent cuts. But at what point is the price right??

[Glenn Petersen] SoftBank plans at least 30% staff cuts to Vision Fund, source confirms Publishe...

Glenn Petersen — 9/29/2022 4:03:16 PM

SoftBank plans at least 30% staff cuts to Vision Fund, source confirms

Published Thu, Sep 29 20229:12 AM EDT
Updated 4 Hours Ago

Deirdre Bosa @dee_bosa
Lauren Feiner @lauren_feiner
CNBC.com

Key Points

SoftBank is planning to cut at least 30% of staff at its ambitious investment arm, the Vision Fund, a source confirmed to CNBC's Deirdre Bosa.
At least 150 out of 500 Vision Fund workers will be impacted by the cuts, according to Bloomberg, which first reported the news Thursday.
SoftBank founder Masayoshi Son had foreshadowed cost-cutting this summer after the company posted a $21.6 billion quarterly loss for the Vision Fund.

SoftBank is planning to cut at least 30% of staff at its ambitious investment arm, the Vision Fund, a source confirmed to CNBC.

At least 150 out of 500 Vision Fund workers will be impacted by the cuts, according to Bloomberg, which first reported the news Thursday.

SoftBank founder Masayoshi Son had foreshadowed cost-cutting and a more conservative investment approach this summer after the company posted a $21.6 billion quarterly loss for the Vision Fund.

Though the fund was created to take big swings, as it did with companies like Uber and WeWork, Son said last month that he's had to learn to become "more systematic" about investments and less swayed by emotions toward specific companies.

"Rather than aiming for the home run ... (we) try to aim for the first base or second base hit," Son said in August.

Still, he said at the time, Vision Fund head count may need to be "reduced dramatically" with "cost reduction" needed across units.

SoftBank declined to comment.

cnbc.com

[Glenn Petersen] OT to Softbank. A familiar face gets another shot. Adam Neumann’s New Company G...

Glenn Petersen — 8/15/2022 8:58:31 AM

OT to Softbank. A familiar face gets another shot.

Adam Neumann’s New Company Gets a Big Check From Andreessen Horowitz

New York Times
August 15, 2022

Adam Neumann is back.

The founder of WeWork, whose spectacular rise and fall has been chronicled in books, documentaries and a scripted television series, has a new venture — and a surprising backer.

Mr. Neumann is starting a new company called Flow, focused on the residential real estate market, the DealBook newsletter reports. Notably, it has the financial support of Andreessen Horowitz, the prominent Silicon Valley venture capital firm that was an early investor in everything from Facebook to Airbnb.

Andreessen Horowitz is considered royalty among early-stage investors, so its backing is a powerful sign of support, and perhaps a rebuke to Mr. Neumann’s critics, who have described his leadership of WeWork as a cautionary tale of corporate hubris.

The firm’s investment in Flow is about $350 million, according to three people briefed on the deal, valuing the company at more than $1 billion before it even opens its doors. The investment is the largest individual check Andreessen Horowitz has ever written in a round of funding to a company.

Flow is expected to launch in 2023, and the venture capital giant’s co-founder Marc Andreessen will join its board, these people said. Mr. Neumann is planning to make a sizable personal investment in the firm in the form of cash and real estate assets.

“It’s often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” Mr. Andreessen wrote in a note posted on his firm’s website on Monday, explaining his rationale for investing in the company.

At its height, WeWork was valued at some $47 billion After a botched public offering and tales of mismanagement, it imploded spectacularly. Mr. Neumann was ousted from WeWork in 2019, but walked away with hundreds of millions of dollars. Today, WeWork has a market value of about $4 billion.

Mr. Andreessen wrote that “we love seeing repeat-founders build on past successes by growing from lessons learned.” For Mr. Neumann, he added, “the successes and lessons are plenty.”

Mr. Neumann, who has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville, aims to rethink the rental housing market by creating a branded product with consistent service and community features. Flow will operate the properties Mr. Neumann has bought and also offer its services to new developments and other third parties. Exact details of the business plan could not be learned. (Flow is unrelated to the crypto company Flowcarbon, which was also co-founded by Mr. Neumann and raised $70 million in May in a round led by Andreessen Horowitz.)

It appears Mr. Neumann’s business will follow a very different model than WeWork, which involved renting office space on a long-term basis and then re-renting it to clients at higher rates for shorter terms. This created its own risks if WeWork was unable to find renters.

In the case of Flow, the business is effectively a service that landlords can team up with for their properties, somewhat similar to the way an owner of a hotel might contract with a branded hotel chain to operate the property.

The investment thesis for Flow appears to reflect economic and social trends that are driving more people to rent homes rather than buy them at a time when there is a housing shortage. A third of Americans rent their homes, and more than half of Americans living in urban settings are renters.

Mr. Neumann made a brief foray into the residential real estate market during his time at WeWork. The company created a division called WeLive that offered short-term rentals and experiences. The business was derided as a social experiment run amok and quickly shut down, one of a few divisions — like WeGrow and Rise by We — that took WeWork away from its core focus. Mr. Neumann has said that the company expanded into too many areas too quickly.

The investment in Flow, while large by venture capital standards, is still far smaller than the $9 billion that Masayoshi Son, the founder of SoftBank, invested in WeWork with the mandate for Mr. Neumann to grow the company as quickly as possible. When WeWork nearly collapsed, Mr. Son invested another $9 billion in the company to shore up its finances, leading to Mr. Neumann’s ouster.

Mr. Andreessen said in his memo that he was particularly interested in Flow because he believed the rental real estate was ripe for disruption, especially now that more people are working from home and “will experience much less, if any, of the in-office social bonding and friendships that local workers enjoy.”

He also hinted that the company might try to address one of the biggest challenges renters face: “You can pay rent for decades and still own zero equity — nothing.” He added: “In a world where limited access to homeownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community and genuine ownership has transformative power for our society.”

It is unclear whether Flow will offer a rent-to-own program or some other mechanism for renters to create equity. Mr. Andreessen and other tech moguls recently opposed a plan for multifamily homes near their estates in the town of Atherton, Calif.

Mr. Neumann declined to comment. In an interview at the DealBook Summit last year, he said of his rise and fall at WeWork that “I have had a lot of time to think, and there have been multiple lessons and multiple regrets.”

The post Adam Neumann’s New Company Gets a Big Check From Andreessen Horowitz appeared first on New York Times.

dnyuz.com

[Glenn Petersen] [graphic]

Glenn Petersen — 8/11/2022 4:01:09 AM

[Glenn Petersen] SoftBank to book $34 billion gain by cutting Alibaba stake to 14.6% (REUTERS)1 ...

Glenn Petersen — 8/10/2022 9:59:44 AM

SoftBank to book $34 billion gain by cutting Alibaba stake to 14.6%

(REUTERS) 1 min read .
Updated: 10 Aug 2022, 04:59 PM IST

Hit by Chinese crackdown on tech sector Ali baba has lost more than two third of its value since 2020

SoftBank Group Corp on Wednesday said it will book an estimated gain of 4.6 trillion yen ($34.08 billion) on settling prepaid forward contracts using shares in Alibaba Group Holding, reducing its stake to 14.6% from 23.7%.

SoftBank on Monday booked a record quarterly net loss due to sliding valuations at its Vision Fund investment arm, with Chief Executive Masayoshi Son pledging to further reduce investment activity and cut costs.

The estimated gain announced on Wednesday includes 2.4 trillion yen from the revaluation of shares in the Chinese e-commerce giant and a derivative gain of 0.7 trillion yen, SoftBank said in a filing.

The transaction "will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts," SoftBank said.

"These will further strengthen our defence against the severe market environment," SoftBank added.

Son bought into Alibaba for $20 million in 2000 and the Chinese company's growth that made it one of the world's biggest e-commerce companies helped to burnish his tech investor credentials.

But Alibaba has lost more than two thirds of its value from highs in late 2020, hit by Beijing's crackdown on the tech sector and its scrutiny of founder Jack Ma.

The SoftBank transaction is not expected to result in additional sales of Alibaba shares on the market as the shares were hedged at the time of the original monetisation, SoftBank said.

Ties between the two companies have weakened, with Ma leaving SoftBank's board in 2020 and Son stepping down from Alibaba's board the same year.

The Japanese billionaire, who has also bet on ventures such as ridehailer Didi Global, has sought to emphasise the decreasing size of China tech in his portfolio as market turmoil has hit valuations and U.S.-China tensions have increased.

($1 = 134.9700 yen)

livemint.com

[Glenn Petersen] SoftBank posts a $21.6 billion quarterly loss on its Vision Fund, one of the hig...

Glenn Petersen — 8/8/2022 5:29:11 AM

SoftBank posts a $21.6 billion quarterly loss on its Vision Fund, one of the highest in its history

Published Mon, Aug 8 20222:33 AM EDT
Updated 2 Min Ago
Arjun Kharpal@ArjunKharpal
CNBC.com

Key Points

SoftBank posted one of its biggest losses at its Vision Fund investment unit for its fiscal first quarter, as technology stocks continue to get hammered amid rising interest rates.
The Japanese giant's Vision Fund posted a 2.93 trillion Japanese yen ($21.68 billion) loss for the June quarter. This is the second-largest quarterly loss for the Vision Fund.

SoftBank posted one of its biggest losses at its Vision Fund investment unit for its fiscal first quarter, as technology stocks continue to get hammered amid rising interest rates.

The Japanese giant's Vision Fund posted a 2.93 trillion Japanese yen ($21.68 billion) loss for the June quarter. This is the second-largest quarterly loss for the Vision Fund.

That contributed to a 3.16 trillion yen net loss for the quarter for SoftBank versus a 761.5 billion yen profit in the same period last year. That is a record quarterly loss for the company.

SoftBank's Vision Fund, which began in 2017 and invests in technology companies, has been hit by a slump in high-growth stocks as a result of rampant inflation that has led the U.S. Federal Reserve and other central banks to raise interest rates.

Masayoshi Son, SoftBank's outspoken founder and the mastermind behind the Vision Fund, said in May the company would go into "defense" mode and be more "conservative" with the pace of investments after posting a record 3.5 trillion Japanese yen loss at the investment unit for the last fiscal year.

SoftBank said it saw a decline in the share prices of a wide range of its portfolio companies, which was "mainly caused by the global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates."

Shares of companies ranging from South Korean e-commerce firm Coupang to DoorDash in the United States were hit hard in the second quarter of the year.

SoftBank said the share prices of private companies in its portfolio also declined.

cnbc.com

[Glenn Petersen] Softbank’s Unicorn Herd Turns Vicious Senior staff departures and widening sign...

Glenn Petersen — 7/8/2022 7:25:45 PM

Softbank’s Unicorn Herd Turns Vicious

Senior staff departures and widening signs of stress in private markets mean more trouble ahead for one of the tech boom’s leading cheerleaders

By Jacky Wong
Heard on the Street
Wall Street Journal
July 8, 2022 6:26 am ET

The technology-startup world is facing a reset. SoftBank, 9434 -0.97%? which epitomized the zeitgeist of the boom years, is facing its own reckoning.

The Japanese company is weathering a shake-up at the top. Rajeev Misra, who helped to create the $100 billion Vision Fund in 2017, will step back from his current role in SoftBank to run a new investment fund outside of the company. The former Deutsche Bank trader will continue to oversee the first Vision Fund, but will give up that role for its successor, Vision Fund 2. Mr. Misra’s decision followed the departures of other senior executives at SoftBank.

Such staff changes may mean even less ballast to balance out the rash investment style of SoftBank’s founder Masayoshi Son. For example, Mr. Misra lobbied internally against a big investment in office-sharing startup WeWork, which ended up in disastrous write-downs for SoftBank. Mr. Son is known for bidding up valuations of startups, offering them more money than they need and encouraging them to spend that money relentlessly in pursuit of growth. Such a model may be fine in a buoyant market, but certainly doesn’t work in the current downturn.

SoftBank is dealing with this washout as funding in the tech industry writ large is drying up. Sweden-based buy-now-pay-later company Klarna is seeking new funding at a valuation of $6.5 billion, an 86% markdown from when it raised money in a SoftBank-led round at $45.6 billion in June last year. It’s hard to avoid a certain feeling of déjà vu: SoftBank witnessed a similar implosion at WeWork in 2019.

Globally, venture capital funding in May fell 14% month-on-month to $39 billion, nearly half its peak of $70 billion in November, according to Crunchbase. Late-stage investing was even worse, which fell 40% from the monthly average in 2021.

As startups are usually reluctant to do “down rounds”—funding rounds that value them lower than previous ones—Klarna’s case may only be the beginning. About half of Vision Fund 1 and three-quarters of its successor fund are invested in unlisted companies. SoftBank has already suffered huge losses on its listed investments: It reported the largest-ever loss for the fiscal year ending in March.

Around a third of the first Vision Fund’s outstanding capital comes from preferred stock, which has to pay a 7% annual coupon. This debtlike structure means SoftBank will need to find cash to pay the investors even in a downturn, one way or another.

SoftBank’s outsize bets have helped push tech valuations into the stratosphere. Coming back to earth will inevitably be painful—and quite possibly messy.

Write to Jacky Wong at jacky.wong@wsj.com

SoftBank’s Unicorn Herd Turns Vicious - WSJ

[Glenn Petersen] SoftBank is cutting its startup investments 50-75% Chief executive Masayoshi So...

Glenn Petersen — 5/12/2022 5:16:23 PM

SoftBank is cutting its startup investments 50-75%

Chief executive Masayoshi Son joined the chorus of VCs souring on new investments during a Thursday earnings call.

Veronica Irwin
Protocol
May 12, 2022

Japanese conglomerate SoftBank is severely cutting its planned startup investments through next March, Chief Executive Masayoshi Son said in a Thursday earnings call. With the announcement, Son joins a chorus of VCs who have been vocal about an economic downturn forcing them to tighten their belts.

“It depends on our LTV levels and investment opportunities, and we strike balance, but I will say compared to last year, the amount of new investments will be half or could be as small as a quarter,” said Son, according to a company-provided translation of the call.

VC funding has slowed down markedly amid a turbulent market. After a heady 2021 for much of the industry, startups have turned to quick cost-cutting and layoffs. The Dow has seen the longest downturn since 2020 this week, while crypto markets also fell 10% between Thursday and Friday alone. Some entrepreneurs and investors have gone so far as to question whether the industry is approaching something like the dot-com crash, with VC David Sacks calling it the "Panic of 2022" on Twitter.

The impact on VC looks particularly dramatic in the case of SoftBank, which is coming off a record-breaking 2021. Its $100 billion Vision Fund and $50 billion Vision Fund 2 (which includes $30 billion of its own money) made it and Tiger Global among the biggest players in VC last year. It also made headlines with the announcement of a $100 million Opportunity Fund, which has helped finance the projects of diverse founders who have struggled to find funding.

But in the last few months, the conglomerate’s VC strategy has done a 180. SoftBank recently reported a loss of $20.5 billion at its Vision Fund for the last fiscal year. The accompanying drop in SoftBank's value, along with the market slide, has meant Son taking a huge financial hit — some $25 billion, or almost two-thirds of his personal fortune.

Softbank CEO says firm will cut startup investments in half - Protocol

[Glenn Petersen] SoftBank’s Vision Funds Are Clouded by Weak IPO Market Firm’s technology invest...

Glenn Petersen — 4/10/2022 7:06:39 AM

SoftBank’s Vision Funds Are Clouded by Weak IPO Market

Firm’s technology investment funds may have fewer avenues to exit stakes after many rough market debuts

By Laura Forman
Wall Street Journal
Updated April 8, 2022 11:50 am ET

Raising capital with public listings “drives a virtuous cycle of growth and progress,” according to SoftBank’s 9434 1.86% investor deck for its two technology-focused Vision Funds. Except when the market craters.

Vision Fund 1 was launched in 2017 as a 12-to-14-year investment vehicle, but 59% of its invested capital was in investments that it has exited or firms that have already listed as of Dec. 31, according to its investment materials—not even five years into its lifespan. Nearly a third of its public listings as of last year came in the fourth quarter of 2021.

The push proved timely. The tech-heavy Nasdaq Composite soared 58% last year, but fell 15% in the first quarter of 2022. You can hardly blame an investment firm for striking while the iron was hot. Then again, the 22 companies in Vision Fund 1 to have gone public as of Dec. 31 had racked up an average loss of nearly 38% from their respective opening prices as of Wednesday, according to data from S&P Capital IQ.

Consider some high-profile Vision Funds holdings: Chinese mobile transportation company DiDi last year moved to delist from the New York Stock Exchange because of Chinese regulatory concerns just six months after it raised billions of dollars in an initial public offering. Its shares plunged 44% in a single day last month after the company said it suspended preparations for a Hong Kong listing. Shares in synthetic biotechnology company Zymergen ZY -2.62% have fallen more than 90% from where they opened in last year’s IPO, after the company said revenue this year would be “immaterial.”

Vision Funds doesn’t mark its investments against a listing price but rather against the prelisting price at which it originally purchased a stake. As such, even investments that have experienced sharp market-value declines in the public markets can be nicely profitable for SoftBank overall.

But the younger Vision Fund 2, launched in 2019, could have a rockier road. With just 13 public offerings of the 209 investments it has made in Vision Fund 2 so far, SoftBank still has a lot riding on public investors’ appetites for future offerings. While SoftBank also uses debt, public listings provide a key source of cash Vision Funds can put back into new investments. In a November Wall Street Journal interview, Vision Funds Chief Financial Officer Navneet Govil discussed SoftBank’s ability to “effectively recycle” funds from “so many companies going public” as crucial in enabling Vision Fund 2 to exclude outside investors.

SoftBank is a minority investor in its Vision Funds companies and, as such, says it encourages them to pursue public listings when the time is right. With that in mind, it seems likely 2022 will be a slower year from an IPO standpoint, given deteriorating market conditions. It is also reasonable to suggest that Vision Funds will make fewer investments this year in turn.

Chief Executive Masayoshi Son has a considerable personal stake in the outcome. As of Dec. 31, Mr. Son held more than 17% of the total equity interests in Vision Fund 2, which had a total commitment of $51 billion.

SoftBank itself is also more indebted than it might appear. Bloomberg Intelligence estimates the company’s loan-to-value ratio is already above target: Excluding prepaid forward contracts from loan and asset value and including contingent liabilities and net debt at SoftBank’s internal hedge fund SB Northstar and Vision Fund 2, the firm’s analysis shows SoftBank’s ratio was recently over 36%.

SoftBank says its policy is to manage this ratio “below 25% in normal times in financial markets, with an upper threshold of 35% even in times of emergency.” SoftBank says according to its own accounting and reporting, its loan to asset value ratio was 21.6% as of Dec. 31.

Fewer public offerings for Vision Funds’ investments in the near-term makes the performance of those that do go public important. Global hotel platform OYO has already filed for a public offering, and SoftBank has said semiconductor-design company Arm will pursue a public offering by March of next year after its purchase by Nvidia was quashed by antitrust concerns. The Journal reported Nvidia’s NVDA -4.50% purchase of Arm could have been worth $80 billion to SoftBank, which owns Arm but transferred roughly a quarter of its stake into Vision Fund 1.

SoftBank has to hope the underperformance of its recent listings hasn’t soured public investors on bidding up Vision Funds’ future public offerings. Vision Fund 2 investments that have gone public thus far are down an average of 51% from their respective opening prices as of Wednesday, data from S&P Capital IQ shows.

The company that boasts a virtuous flywheel risks becoming a fly on the wheel.

Write to Laura Forman at laura.forman@wsj.com
SoftBank’s Vision Funds Are Clouded by Weak IPO Market - WSJ

[Glenn Petersen] h/t Sr K SoftBank’s Alibaba Stake in Spotlight Amid Stock-Market Turbulence Sh...

Glenn Petersen — 3/26/2022 2:08:07 PM

h/t Sr K

SoftBank’s Alibaba Stake in Spotlight Amid Stock-Market Turbulence

Shares in the Chinese e-commerce giant have been hit hard over the past year by Beijing’s clampdown on the sector

By Dave Sebastian
Wall Street Journal
March 26, 2022 5:30 am ET

The turmoil in Chinese technology shares is damping the financial firepower Japan’s SoftBank 9984 -1.75% Group Corp. has for new investments, and prompting debate about whether it might sell some of its huge stake in Alibaba BABA -1.88% Group Holding Ltd.

Shares in Alibaba—SoftBank’s single biggest investment—and other Chinese tech companies have been hit hard over the past year by Beijing’s clampdown on the sector and have been highly volatile in recent weeks. Outside of Chinese shares, some other fast-growing tech companies backed by SoftBank have also fallen in value, such as Uber Technologies Inc. UBER -1.84% and Coupang Inc. CPNG -6.45%

The Nasdaq Golden Dragon China Index of U.S.-listed Chinese stocks has declined 52% over the 12 months through Friday. Alibaba has fallen 49%, and SoftBank’s Tokyo-listed stock has dropped 40%.

Falling valuations for its holdings have pushed SoftBank close to its self-imposed debt limit of a loan-to-value ratio of 25%, estimated David Gibson, a senior research analyst who covers the Japanese internet sector at MST Financial in Australia. That would imply limits on new borrowing, investments and share buybacks, Mr. Gibson said.

Mr. Gibson pointed to SoftBank’s Vision Fund, which includes holdings such as Didi Global Inc., whose U.S.-listed shares have fallen more than 70% from its offering price of $14 last summer. “SoftBank is constrained by capital now, and that’s because of not just Alibaba’s market-cap decline, but also the Vision Fund as well,” he said.

Founder Masayoshi Son has said SoftBank’s loan-to-value ratio, or net debt divided by the equity value of its holdings, should usually be 25% or lower. S&P Global Ratings in March said it expects SoftBank to manage the ratio at about 30%, by adjusting the pace of investment in its fund business.

Investors have been watchful recently for signs SoftBank could potentially sell part of its near-25% stake in Alibaba. SoftBank recorded a gain equivalent to $558 million in the last three months of 2021 after using what Mr. Son called a “tiny bit” of Alibaba stock to settle contracts.

“SoftBank might need to sell more of [its] Alibaba stock because they have a lot more funding needs going forward,” said Atul Goyal, an analyst covering tech, games and telecommunications at Jefferies. A SoftBank spokeswoman declined to comment on listed holdings.

In its quest to fund new investments, Mr. Son’s company has in recent years already raised tens of billions of dollars backed by shares in the Chinese e-commerce giant and some of SoftBank’s other listed holdings, while stopping short of an outright sale.

This so-called asset-backed funding, using a mix of derivatives and loans, shows SoftBank’s openness to bold and sometimes complex financial arrangements. The figures don’t affect the loan-to-value ratio, which reflects conventional debt.

In April through December 2021, SoftBank said it had raised a net $6.9 billion of asset-backed financing using Alibaba shares. It has also raised funds against its holdings in T-Mobile US Inc., Deutsche Telekom AG and SoftBank Corp., the company’s telecommunications affiliate.

Overall, asset-backed financing using Alibaba stock was valued at the equivalent of about $25.8 billion at the end of 2021, SoftBank said last month, equivalent to about 35% of its Alibaba holding.

The funding is obtained partly through margin loans, and partly through prepaid forward contracts. The contracts are agreements in which banks or brokers pay SoftBank upfront, and it agrees to settle the obligation later, either in stock, cash or a mixture.

The contracts could be one way in which SoftBank reduces its stake in Alibaba. However, they don’t commit SoftBank to selling any shares in future, and how it chooses to settle could depend on issues such as its liquidity and Alibaba’s share price.

Some deals set minimum prices for shares used to settle the contract, while others set both a minimum and a maximum. A recent SoftBank presentation said the use of forwards “hedges against a fall in share price below the floor price.”

Alibaba’s contribution to SoftBank’s overall net asset value has fallen sharply, to 24% as of December 2021, down from a peak of 60% in September 2020. The figures exclude Alibaba shares that have been used for fundraising.

Despite the pullback, Alibaba remains among the most successful investments for SoftBank, which started with a $20 million investment in the Hangzhou, China-based company in 2000. “I think Alibaba is still a great company,” Mr. Son said in February.

A recent intervention by Chinese policy makers to restore market confidence, and a move by Alibaba to increase its buyback program to a record $25 billion, have helped the Chinese company’s shares recoup most of their year-to-date losses.

—Megumi Fujikawa contributed to this article.

Write to Dave Sebastian at dave.sebastian@wsj.com

SoftBank’s Alibaba Stake in Spotlight Amid Stock-Market Turbulence - WSJ

[Glenn Petersen] SoftBank Is Seeking at Least $60 Billion in Arm IPO -- Goldman and JPMorgan poi...

Glenn Petersen — 3/24/2022 5:41:48 PM

SoftBank Is Seeking at Least $60 Billion in Arm IPO

-- Goldman and JPMorgan poised to provide loan ahead of offering

-- Japanese owner is seeking higher price than Nvidia offered

By Ian King, Crystal Tse, and Liana Baker
Bloomberg
March 24, 2022, 12:48 PM CDT
Updated onMarch 24, 2022, 2:04 PM CDT

SoftBank Group Corp. is seeking a valuation of at least $60 billion for Arm Ltd. when the business goes public, according to people familiar with the matter, aiming for a higher amount than it would have gotten from its failed sale of the chip designer to Nvidia Corp.

SoftBank is poised to appoint Goldman Sachs Group Inc., JPMorgan Chase & Co. and Mizuho Financial Group Inc. to lead a loan transaction for Arm ahead of the planned initial public offering, according to the people, who asked not to be identified because the situation is private. The firms handling the loan are likely to also have lead roles on the IPO, but the lineup isn’t final and more banks could be added, the people said.

Valuing Arm at more than $60 billion is a gambit for SoftBank Chief Executive Officer Masayoshi Son, who acquired the business in 2016 for about $32 billion. It would mean convincing investors that Arm deserves a higher valuation than its semiconductor peers -- and what the business would have fetched in the $40 billion Nvidia deal, which collapsed under regulatory pressure.

Arm’s valuation could still change based on a variety of factors, including market conditions, the people said. Chip stocks enjoyed a big run-up during the pandemic, fueled in part by demand for work-at-home technology, but they’ve cooled this year. The Philadelphia Stock Exchange Semiconductor Index is down 11% in 2022.

SoftBank, Arm, Goldman Sachs, JPMorgan and Mizuho declined to comment.

Though Arm is little-known to consumers, its influence in the electronics industry is hard to overstate. The company’s technology is at the heart of components that run much of the modern economy and its presence is growing. The company licenses fundamental elements of semiconductors and also sells chip designs to many of the world’s largest companies.

But Arm’s pervasiveness is due in part to its relatively low fees. While there are billions of chips made each year that use Arm’s blueprints, it has about $2.6 billion in annual sales, a fraction of what companies such as Intel Corp. pull in. Based on an average revenue multiple for chip companies, Arm would be worth less than $30 billion.

SoftBank announced a deal to sell Arm to Nvidia in September 2020, but the transaction almost immediately faced obstacles. Arm’s customers opposed the takeover, and regulators around the world gave it close scrutiny. The deal began to unravel after the U.S. Federal Trade Commission sued to block it in December, and Nvidia walked away last month.

That sent SoftBank back to its previous plan to earn a return from Arm: an IPO. In pitching the offering, SoftBank and its bankers will argue that Arm shouldn’t be valued like a typical chip business. Arm is increasingly focusing on higher-value designs for products such as server chips, which can cost thousands of dollars for just one processor.

SoftBank has said it’s aiming to conduct the IPO in its current fiscal year, which ends next March. Linking a margin loan to an IPO mandate has become a favorite tactic of Son, a 64-year-old billionaire who founded SoftBank 40 years ago. The approach helps test the risk appetites of the banks that want to underwrite the IPO.

In 2018, SoftBank lined up commitments for a loan of $9 billion for its Vision Fund, provided by advisory firms that included arrangers of its Japanese wireless business’s IPO, Bloomberg reported. Last year, the fund arranged margin loans backed by its stakes in South Korean e-commerce giant Coupang Inc. and online food-delivery service DoorDash Inc.

bloomberg.com

[Glenn Petersen] Nvidia Can Afford to Lose an Arm. But SoftBank Needs to Slim Down. While U.S. c...

Glenn Petersen — 2/8/2022 6:39:51 PM

Nvidia Can Afford to Lose an Arm. But SoftBank Needs to Slim Down.

While U.S. chip company can let biggest semiconductor deal lapse, seller SoftBank is in a trickier position

By Jacky Wong
Heard On The Street
Wall Street Journal
Feb. 8, 2022 7:33 am ET

Brawny chip company Nvidia can afford to lose Arm. Keeping the high-tech appendage fully attached a while longer may prove a headache for SoftBank.

The derailment of graphics-chip company Nvidia’s planned purchase of chip designer Arm from SoftBank isn’t exactly a surprise. The transaction—which would have been the largest-ever deal in the semiconductor industry—was fighting an uphill battle since the beginning because of antitrust concerns. Arm’s chip-design architecture powers almost every mobile device on the planet, and the company counts many of Nvidia’s rivals among its customers. The cash-and-stock deal was valued at around $40 billion at its unveiling and would have been valued at more than $60 billion at current prices as Nvidia’s shares have doubled since then.

Nvidia’s move always seemed opportunistic, and analysts had never been very sanguine on the odds of completing the deal. The company has also been doing well on its own: Its revenue has soared because its chips are in great demand for gaming and artificial-intelligence applications. With a market value of $618 billion, it is now the world’s most valuable chip company. And Nvidia may do even better without the regulatory scrutiny it would have attracted from owning Arm.

On the other hand SoftBank, which bought Arm for $32 billion in 2016, will receive a $1.25 billion break fee but will also need to find another way to raise cash from the British chip designer. The Japanese company says it will pursue an initial public offering in the fiscal year ending March 2023. It may need to move fast to cash in on the chip boom. The PHLX Semiconductor index has doubled in the past two years but the recent selloff in high-growth stocks has hit the sector too: It’s down 13% so far this year. Arm’s revenue for the nine months ended December grew 47% year on year, but getting a better price than Nvidia was willing to pay will still be challenging.

In contrast to Nvidia, SoftBank’s share price has halved since March. The technology crackdown in China, which hit big SoftBank investments like Alibaba particularly hard, has been a main culprit. The dip in U.S. tech stocks is now rubbing more salt into the wound. SoftBank’s net asset value was just $168 billion in December, down from $187 billion three months earlier, the company said Tuesday.

An $8.8 billion buyback unveiled in November failed to lift the share price for long. Listing Arm could help SoftBank raise cash as it continues to pour money into startups and give a clearer picture of how much the company is actually worth. Alibaba’s shares fell 6% Monday in New York on fear that SoftBank may cut its stake to fund buybacks and other investments.

SoftBank needs to find another place to put its Arm. If it waits too long and the Fed keeps sending hawkish signals, it may find the asking price heading down in tandem with investors’ appetite for tech stocks in general.

Nvidia Can Afford to Lose an Arm. But SoftBank Needs to Slim Down. - WSJ

[Glenn Petersen] Does Alibaba registering 1 billion American shares mean major shareholder SoftBa...

Glenn Petersen — 2/8/2022 1:26:58 PM

Does Alibaba registering 1 billion American shares mean major shareholder SoftBank is heading for the exit?

-- Alibaba filed to register 1 billion new American depositary shares to make room for shares to be deposited by unnamed existing holders

-- Stock slumped 4.5 per cent as analysts speculated SoftBank may be planning to sell its stake

Cheryl Heng
South China Morning Post
Published: 8:00pm, 7 Feb, 2022

Alibaba Group Holding slumped in Hong Kong by the most in four trading days after the e-commerce group filed to register more American depositary shares (ADS) in the coming days, stoking speculation that some insiders are preparing to sell their stakes.

The Hangzhou-based company plans to register an additional 1 billion new ADSs, according to its 6F filing in New York on February 4. The move is to prepare for the deposit of ordinary shares, including by current holders who have indicated their intent to do so in the future, Alibaba said.

While this issuance does not dilute investors’ stakes or raise additional capital, it created additional uncertainty in a stock whose slump over 12 months to an all-time low has already unnerved investors and wrong-footed analysts. Citigroup said in a February 6 report that SoftBank Group may be planning to cut its stake in the company.

“What we can analyse about the situation is similar to Citi’s, but at the moment it is just a guess,” said Zhang Jun, head of research and portfolio manager of China Asset Management (HK). SoftBank, one of the earliest and biggest financial backers of Alibaba, has also previously sold the company’s shares but that has not [required] new registration of ADSs, he added.

Alibaba’s issued capital comprised 21.7 billion ordinary shares, translating into the equivalent of 2.72 billion ADSs, according to its most recent financial report. The new ADSs would amount to more than one-third of the existing base. One ADS represents eight ordinary shares.

SoftBank has a long-term “Master ADS Agreement” from September 2014 to deposit its shares into so-called structural safekeeping accounts (SSA) and sell them in the form of ADS. SoftBank held 5.39 billion ordinary shares, or about a quarter of Alibaba’s issued capital, according to its November 2019 IPO prospectus.

Other key shareholders of Alibaba are co-founder Jack Ma, with a 6 per cent stake, and directors and executive officers with a combined 9 per cent stake. Alibaba is the owner of South China Morning Post.

SoftBank and Alibaba did not immediately reply to emails seeking comment on the February 4 filing.

Does Alibaba registering 1 billion American shares mean major shareholder SoftBank is heading for the exit? | South China Morning Post (scmp.com)

[Sr K] Nvidia, SoftBank Call Off Blockbuster Arm Deal SoftBank revives plans to take t...

Sr K — 2/8/2022 1:03:42 AM

Nvidia, SoftBank Call Off Blockbuster Arm Deal

SoftBank revives plans to take the U.K.-based chip-design specialist public, aims to launch IPO before the end of the year

SoftBank, which owns U.K.-based Arm, now plans to pursue a public listing for the chip-design specialist.PHOTO: COSTFOTO/ZUMA PRESS

By
Robert Wall Follow

Feb. 8, 2022 12:14 am ET

Nvidia Corp. and Japan’s SoftBank Group Corp. are abandoning a blockbuster deal for the U.S. semiconductor giant to acquire chip-design specialist Arm after regulators raised antitrust concerns, a person familiar with the matter said.

SoftBank, which owns Arm, now plans to pursue a public listing for the U.K.-based chip business, the person said.

The U.S. graphics chip giant in September 2020 agreed to buy Arm for $40 billion from SoftBank in what would have been the chip industry’s biggest deal ever. The nominal value of the deal had risen along with Nvidia share price that has advanced sharply in the intervening time amid booming semiconductor demand.

The proposed deal quickly raised eyebrows with regulators and chip-making rivals. The Federal Trade Commission in December sued to block the transaction, alleging it would give Nvidia unlawful control over computing technology and designs that rivals need to develop their own competing chips.

SoftBank stands to pocket a $1.25 billion breakup fee from the failed transaction with Nvidia, the person said. The Financial Times earlier reported the deal had fallen through.

This isn’t the first time regulators have upended a massive chip deal. The U.S., in 2018, derailed Broadcom Inc.’s attempted $117 billion takeover of another chip giant, Qualcomm Inc., on national-security grounds. Qualcomm’s $44 billion purchase of Dutch chip maker NXP Semiconductors NV fell apart in 2018 when China failed to give its regulatory approval.

Arm, based in Cambridge, England, is one of the world’s most important behind-the-scenes semiconductor businesses. Companies such as Apple Inc., Qualcomm and Advanced Micro Devices Inc. rely on its design expertise for some of their chips, with Arm acting as a kind of Switzerland to the chip industry—offering its designs to everyone without favoring any one company. Nvidia and Arm had vowed that wouldn’t change if the deal went through.

SoftBank, which bought Arm almost six years ago for $32 billion, had struggled to jump-start growth in the business. Before agreeing to sell Arm to Nvidia, SoftBank had considered taking the business public. SoftBank plans to complete its revived plans for an Arm IPO before the end of its next fiscal year, which starts in April, the person said.

Arm will have a new boss during the IPO process. Simon Segars has decided to step down, the person said, to be replaced by Rene Haas, another company executive.

The U.S. isn’t the only jurisdiction where the transaction was facing scrutiny. Britain’s antitrust regulator last year began an in-depth investigation of the proposed transaction, citing both competition and national-security concerns. The regulator had previously said that Nvidia’s acquisition of Arm would lead to a realistic prospect of less competition, less innovation and more expensive products. China also had begun a review of the deal, as had others.

For Nvidia Chief Executive Jensen Huang, the proposed acquisition of Arm represented one of his biggest bets to expand beyond the company’s historic niche of making graphics processors used heavily in videogames and for artificial-intelligence calculations and cryptocurrency mining. It came in a year that Nvidia overtook IntelCorp. as America’s biggest semiconductor company by market value and only a few months after Apple said that it was ditching Intel in its Mac computers in favor of its own chip design with Arm ingredients.

More recently Mr. Huang has his sights set on the so-called metaverse, a loosely defined group of online realms where users playing as avatars can hang out and participate in immersive experiences with others. Nvidia is offering software called Omniverse Enterprise that offers collaboration and simulation tools such as the ability to create interactive artificial-intelligence avatars.

Exc.

[Glenn Petersen] Softbank COO Marcelo Claure, right-hand man to Masa Son, is leaving the company,...

Glenn Petersen — 1/27/2022 1:36:51 PM

Softbank COO Marcelo Claure, right-hand man to Masa Son, is leaving the company, sources say

PUBLISHED THU, JAN 27 202211:45 AM EST
UPDATED AN HOUR AGO
Andrew Ross Sorkin @ANDREWRSORKI
Alex Sherman @SHERMAN4949
CNBC.com

KEY POINTS

-- SoftBank COO Marcelo Claure is leaving SoftBank today, sources say.

-- Claure took over running WeWork after founder Adam Neumann stepped down.

-- Claure joined SoftBank in 2013 and has been one of CEO Masayoshi Son’s closest advisors.

SoftBank Chief Operating Officer Marcelo Claure is preparing to resign from the the Japanese technology conglomerate as soon as today, according to people familiar with the matter.

Claure has been in discussions to leave for SoftBank for several months, said the people, who asked not to be named because the negotiations are private. Claure may want to run his own investment firm, one of the people said.

Claure joined SoftBank in 2013 after selling a majority stake of wireless provider Brightstar to the company for $1.26 billion. He later became CEO of the Softbank-majority owned Sprint, which successfully merged with T-Mobile in April 2020.

When Claure stepped down as Sprint CEO in 2018, he took on additional roles at SoftBank, including COO at SoftBank Group and CEO at SoftBank Group International. SoftBank Group chairman and CEO Masayoshi Son chose him to revamp WeWork in October 2019 after Son helped push out WeWork founder Adam Neumann from running the company.

The New York Times reported Claure wanted $2 billion in compensation from SoftBank for turning around WeWork, which went public via special purpose acquisition vehicle in October, and successfully putting Sprint together with T-Mobile. Bloomberg reported earlier today Claure is stepping down due to compensation disagreements with Son.

This isn’t the first time a close advisor to Son has abruptly departed the company. Nikesh Arora, who came to SoftBank to eventually succeed Son, left in 2016 when Son decided he wasn’t ready to step down. Alok Sama, another top Son lieutenant, left the company in 2019.
SoftBank COO Marcelo Claure is leaving the company, sources say (cnbc.com)

[Glenn Petersen] Nvidia is reportedly preparing to abandon its $40 billion takeover of Arm PUBL...

Glenn Petersen — 1/25/2022 10:24:12 AM

Nvidia is reportedly preparing to abandon its $40 billion takeover of Arm

PUBLISHED TUE, JAN 25 20226:36 AM EST
UPDATED 7 MIN AGO
Ryan Browne @RYAN_BROWNE_
CNBC.com

KEY POINTS

-- Nvidia is “quietly” preparing to abandon its $40 billion acquisition of British chip designer Arm, Bloomberg News reports.

-- The deal has faced close scrutiny from regulators around the world, who worry it would give Nvidia an unfair advantage in the semiconductor industry.

Nvidia is “quietly” preparing to abandon its $40 billion acquisition of British chip designer Arm, Bloomberg News reported Tuesday.

The U.S. chipmaker has told partners it’s not expecting the deal to be finalized, the news agency reported, citing people familiar with the matter. SoftBank, which currently owns Arm, is ramping up preparations for Arm to go public in lieu of the Nvidia takeover, according to Bloomberg.

“We continue to hold the views expressed in detail in our latest regulatory filings — that this transaction provides an opportunity to accelerate Arm and boost competition and innovation,” a Nvidia spokesperson told CNBC by email.

A SoftBank spokesperson said, “We remain hopeful that the transaction will be approved.”

An Arm spokesperson directed CNBC to Nvidia’s statement.

Shares of Nvidia fell nearly 5% in morning trading on the news.

The deal has faced close scrutiny from regulators around the world, who worry it would give Nvidia an unfair advantage in the semiconductor industry.

The U.S. Federal Trade Commission last month sued to block the transaction on antitrust grounds, while British regulators are probing the deal over concerns it would pose a threat to national security. Nvidia also faces multiple regulatory obstacles in China, where Arm has a joint venture with private equity firm Hopu Investments.

Arm is often considered the “crown jewel” in the U.K.’s tech industry. Its energy-efficient chip architectures are used in 95% of the world’s smartphones and 95% of the chips designed in China. The company makes money from royalties paid by manufacturers.

You can read the full Bloomberg report here.

— CNBC’s Sam Shead contributed to this report

Nvidia preparing to abandon Arm takeover, Bloomberg reports (cnbc.com)

[Glenn Petersen] OT to Softbank, but a reminder that as no good deed go unpunished, bad behavior ...

Glenn Petersen — 1/6/2022 5:19:50 AM

OT to Softbank, but a reminder that as no good deed go unpunished, bad behavior and incompetence are often rewarded.

WeWork Co-Founder Adam Neumann Is Becoming an Apartment Mogul

Entities tied to the entrepreneur have bought majority stakes valued at a total of more than $1 billion in buildings in Southern cities

By Konrad Putzier and Eliot Brown
Wall Street Journal
Jan. 4, 2022 5:30 am ET

Adam Neumann, who built office co-working giant WeWork before resigning as chief executive when his fortunes soured, has a new business venture under way: apartment landlord.

Entities tied to Mr. Neumann have been quietly acquiring majority stakes in more than 4,000 apartments valued at more than $1 billion in Miami, Atlanta, Nashville, Tenn., Fort Lauderdale, Fla., and other U.S. cities, according to court, property and corporate records and people familiar with the transactions. Many of these investments occurred within the past year.

Mr. Neumann has told friends and associates of his ambitions to build a company that would shake up the rental-housing industry, say people familiar with the matter.

Exactly how he plans to accomplish this goal couldn’t be learned, and his investments so far have largely been in traditional apartment buildings. Mr. Neumann has said he wants to create a widely recognizable apartment brand stocked with amenities, according to a person who was part of these conversations. His Nashville property, the 268-unit Stacks on Main, features a saltwater pool, a dog park and valet trash pickup, according to the building’s website.

Adam Neumann left WeWork in late 2019 after plans for an IPO fell through.PHOTO: GETTY IMAGES
---------------------------------

Mr. Neumann is hoping to appeal to the same sort of young professionals he lured to hundreds of co-working office spaces when he was chief executive at WeWork, said those people familiar with the matter. His flexible office space was renowned for offerings such as free craft beer and fruit water.

D.J. Mauch, a partner in Mr. Neumann’s family office, said: “Since the spring of 2020, we have been excited about multifamily apartment living in vibrant cities where a new generation of young people increasingly are choosing to live, the kind of cities that are redefining the future of living. We’re excited to play a role in that future.”

Mr. Neumann has also invested in a number of startups, according to a person familiar with the matter.

Mr. Neumann co-founded WeWork in 2010 and raised more than $10 billion for a business once valued at $47 billion, persuading investors to value it as a tech company despite its real-estate roots. He also launched WeLive, planned as a network of buildings where people can rent rooms in shared, furnished apartments. The company opened apartment buildings in New York and Virginia, but WeWork closed WeLive after Mr. Neumann’s departure.

The 42-year-old entrepreneur left the company in late 2019 after plans for an initial public offering of stock fell through amid concerns over his management style and heavy losses. WeWork, now publicly traded, has a market capitalization of about $7 billion. That valuation is more in line with real-estate companies than fast-growing tech firms.

Mr. Neumann became rich working at WeWork, and is using his own funds toward buying stakes in the apartment buildings, according to a person familiar with the matter. When Mr. Neumann served as CEO, he and his co-founder sold a total of more than $500 million of stock, largely at higher share prices than today, according to documents and people familiar with the sales. To encourage Mr. Neumann to give up his control of the company, WeWork majority owner SoftBank Group Corp. paid him nearly $200 million for consulting and other fees and bought $578 million of shares from him, according to WeWork securities filings.

Mr. Neumann helped fuel the U.S. co-working craze through his company’s rapid expansion. At one point, WeWork occupied more Manhattan office space than any other company. But he is following the crowd in the already hot apartment business.

The sector has experienced rising investor interest since the start of the Covid-19 pandemic, particularly in the booming Sunbelt. Rents are surging in many cities alongside rising household incomes and housing shortages that analysts say are unlikely to disappear soon. Cities such as Nashville and Miami are also attracting migrants from the Northeast seeking warmer weather, less-costly housing and lower taxes.

In 2020, Mr. Neumann acquired a major stake in Alfred Club Inc., a company that provides concierge services such as picking up and dropping off groceries and laundry in residential buildings.

SHARE YOUR THOUGHTSHow do you think Adam Neumann might change the apartment-rental market? Join the conversation below.

His real-estate holdings, which include two apartment buildings in Atlanta, are mostly recently built properties with more than 200 units and lots of common amenities.

In Fort Lauderdale, an entity tied to Mr. Neumann owns Society Las Olas, according to court records. The 639-unit apartment building includes a co-working space, a putting green and a barber shop, according to the developer’s website.

In downtown Miami, Mr. Neumann recently signed a contract to buy a majority stake in the 444-unit Caoba apartment tower, valuing the property at roughly $200 million, according to a person familiar with the matter. An entity tied to Mr. Neumann also owns the nearby 387-unit Yard 8 apartment building, court records show.

Mr. Neumann has also invested in suburban apartments, where demand has grown as remote workers leave crowded city centers in search of more space. He holds stakes in a building in Decatur, Ga., according to public records, and another in Norwalk, Conn., said a person familiar with the matter.

Write to Konrad Putzier at konrad.putzier@wsj.com and Eliot Brown at eliot.brown@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 5, 2022, print edition as 'WeWork Co-Founder Snaps Up Apartments.'

WeWork Co-Founder Adam Neumann Is Becoming an Apartment Mogul - WSJ