Betting Big: SoftBank Consolidates ARM Ownership Before Mega $54.5B IPO

ARM Holdings PLC ARM launched its initial public offering (IPO) Thursday, with a valuation of $54.5 billion, marking the biggest IPO of 2023.

SoftBank Group Corp - ADR SFTBY, which acquired ARM in 2016 for $32 billion, is retaining 90% ownership and is offering 10% of the company on the open market at $51 per share.

However, there's more to the story. SoftBank, previously owning 75% of the company, acquired the remaining 25% to consolidate its ownership at 100% before the IPO. A sign of bullish confidence?

ARM is known for its CPUs, a vital component for Nvidia Corp’s NVDA GPUs to operate artificial intelligence functions.

SoftBank founder Masayoshi Son highlighted the company's decision to repurchase a 25% stake in ARM from its SoftBank Vision Fund in a Thursday CNBC interview.

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The buyback, which valued ARM at $64 billion — double what it initially paid — came ahead of ARM's IPO and at a price point higher than the offering price.

"SoftBank owned 75% of ARM just a few weeks ago. We bought back from 75% to 100% from Vision Fund, paying an even higher price," Son said. "I'm more confident about the future. I see value having a significant upside. That's why I bought back at a price higher than $51."

The deal with the Vision Fund, which involved prominent investors including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala, comes as a respite after setbacks from investments in WeWork Inc WE and Didi Global Inc - ADR DIDIY.

Read also: SoftBank Retains 90% Of Arm After IPO: Haas, Son Discuss China Dynamics

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