The valuation value of the English Arm is lower than expected to go public on a scale of 52 billion dollars
This article uses automatic translation for some of its parts
$SoftBank Group(9984.JP$Of a semiconductor design company under its umbrellaarmOn the 5th, provisional conditions for the public price of US Depositary Securities that have applied for listing on the US Stock Exchange NASDAQ47 to 51It was announced that it was set to dollars. In the case of the price cap, the total market value is approximately 52 billion dollars, making it the largest listing project this year. Arm is an American Depositary Receipt (ADR)95.5 million unitsIt will be made public. On the NASDAQListed under the stock code “ARM”I'll do it. 1 ADR is equivalent to 1 common share.
SBG holds shares in line with Arm's listingLess than 10%I will sell it. rice $Apple(AAPL.US$ Ya $Alphabet-C(GOOG.US$ 、 $NVIDIA(NVDA.US$It was officially disclosed that 10 companies, including South Korea's Samsung Electronics, are considering acquiring ARM ADR. SBG looks at semiconductor development/production demand associated with the spread of artificial intelligence (AI), and continues to own the remaining 90%.
According to Bloomberg, the armAiming to raise 5 billion dollars to 7 billion dollarsYes, but it is lower than the previous target of 10 billion dollars.Ultimately, the valuationIt is said that it will be lower than the previous target range of 60 billion dollars to 70 billion dollars.
The valuation value is lower than expected. why?
The SoftBank Group, led by Masayoshi Son, acquired the semiconductor design company Arm in 2016. Mr. Sun was very excited about the deal and told analysts, “What we can almost certainly say is that it will grow fivefold within 5 years.”
The SoftBank Group, led by Masayoshi Son, acquired the semiconductor design company Arm in 2016. Mr. Sun was very excited about the deal and told analysts, “What we can almost certainly say is that it will grow fivefold within 5 years.”
However, that was not the case.
Arm remains a leading company in designing chip components for smartphones, computers, and automobiles, but SoftBank's biggest acquisition in history is far from that grand goal. Since 2016,Arm's sales increased 65%, slightly surpassing the semiconductor industry as a whole, but it lags far behind the industry's top companies. The drastic increase in research and development expenses has not yet led to the rise in profits anticipated by Masayoshi Son. Furthermore, it is said that the bet on the Internet of Things (IoT) also failed.
The increase in sales and profit of Arm in recent years is limitedTherefore, if arm shares of SoftBank Vision Fund (SoftBank Vision Fund) are listed at the price at which they were acquired,Revenue is twice the amount of the original acquisitionIt becomes. In contrast, from 2016/9 (when the acquisition was completed),If you invest in the NASDAQ Composite Index, your profit is approximately 2.67 timesIt becomes (if dividends are also reinvested).
Analysts said that one reason for this problem was that Arm's smartphone business already had an overwhelming advantage in the industry at the time,There was little room for further growthIt has been pointed out.
AI and Arm China
What is important for potential investors in Arm isAI and Arm ChinaIt is.
What is important for potential investors in Arm isAI and Arm ChinaIt is.
As we enter this year, there is already a market frenzy surrounding AI $NVIDIA(NVDA.US$It has brought about a big rise in stock prices such as.
The AI boom is expected to boost demand for server chips rather than chips used in smartphones and home computers, and Arm occupies the highest market share in the latter business. Nevertheless, Arm assumes that there is a possibility that demand for chips using arm designs will increase due to the development of AI-compatible systems such as autonomous vehicles, etc., and positions itself as a beneficiary.
According to Arm's prospectus,Arms will be at the core of this transformationIt's called.
Regarding Arm China, Kirk Boudrey, an analyst at Astris Advisory, said in his reportArm's exposure to China is higher than expectedIt was said.
According to the prospectus, most of Arm's business in China is carried out through Arm China, which is an independent division, and Arm China is Arm's biggest customer, accounting for almost one-quarter of FY's sales up to March this year.
In the risk section of the 229-page prospectus, Arm explained in detail commercial risks etc. in China. Arm Technology (China) Co., Ltd. (Arm China) is mentioned 208 times, “China” 222 times, and “PRC” 130 times in its prospectus.
According to the company, access to the Chinese market is dependent on its relationship with Arm China, which has developed its business independently and has become its biggest customer.
“If that commercial relationship no longer exists or worsens, our ability to compete in the PRC market could be seriously and adversely affected,” Arm warned in its prospectus.
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Source: Bloomberg, Google Finance, THE WALL STREET JOURNAL, South China Morning Post, Nihon Keizai Shimbun, Dow Jones
This article uses automatic translation for some of its parts
Source: Bloomberg, Google Finance, THE WALL STREET JOURNAL, South China Morning Post, Nihon Keizai Shimbun, Dow Jones
This article uses automatic translation for some of its parts
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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