SoftBank’s Arm IPO Win Won’t Make Up for What It Missed Out On

Here’s a declaration the tech press doesn’t get to make very often: It’s a good day to be SoftBank. Arm, a chip designer the SoftBank Group has owned since 2016, finally released its investor prospectus this afternoon, a key step before the initial public offering expected next month. If investors bite—no sure thing, as I explain below—Arm’s valuation could surpass $60 billion. That’s roughly double the price SoftBank paid seven years ago to take the semiconductor firm private. 

But it’s not all glory for SoftBank—the striking caveat is that this Arm investment could have turned out much, much better for the Japanese conglomerate. Consider this mammoth missed opportunity: Its planned 2020 deal to sell Arm to Nvidia would have given SoftBank a roughly $25 billion stake in Nvidia that would now be worth $93 billion after the chipmaker’s incredible stock run-up this year helped it surpass $1 trillion in market capitalization. Instead, regulators sued to block the deal over antitrust concerns and Nvidia pulled out, nixing SoftBank’s potential stake in an even bigger semiconductor success story.