Arm IPO Party Over

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  • SoftBank Group Corp.’s stock experienced a notable decline, falling by as much as 4.3% in a single day, marking the largest intraday drop in over a month. This decline was attributed to profit-taking and had a significant impact on the newly-listed chip unit, Arm Holdings Plc, whose shares also experienced a consecutive 4.5% drop over two days. This dip followed a remarkable 25% surge in Arm's shares on its debut trading day on Nasdaq.

  • Arm Holdings Plc's IPO, valued at $5 billion, was considered the year's most significant IPO and was viewed as a success for SoftBank founder Masayoshi Son. This success was particularly noteworthy considering SoftBank's history of less successful investments in startups. SoftBank, headquartered in Tokyo and known for its investments in artificial intelligence-related technology, announced that it anticipates earning proceeds of $5.12 billion, after deducting expenses, in the current quarter as a result of Arm's IPO. However, this financial gain will not impact SoftBank's consolidated earnings because Arm remains a subsidiary of the company.

Why it matters

Instead, SoftBank clarified that this sum would be recorded as a capital surplus. The company maintained a substantial cash reserve of approximately $42 billion as of June. SoftBank has been strategically accumulating cash to strengthen its financial position, a move prompted by substantial losses incurred by its Vision Fund, which amounted to billions of dollars.


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