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SoftBank CEO Masayoshi Son speaks during a news conference in Tokyo on Feb. 8. (Photo courtesy of SBG)
Business Spotlight

Collapse of Nvidia deal costs SoftBank an Arm and a leg

IPO could value chip designer at half what Masayoshi Son expected from sale, analysts say

YIFAN YU and WATARU SUZUKI, Nikkei staff writers | Japan

PALO ALTO, U.S./TOKYO -- SoftBank's deal to sell the chip designer Arm to U.S. semiconductor giant Nvidia was worth $66 billion on paper when it collapsed this week -- more than twice what SoftBank paid for the U.K. business in 2016. Now, instead of a fat profit from a sale, SoftBank is looking at an initial public offering for Arm in which it might struggle to break even.

The scale of the valuation setback hinges, analysts say, on whether Arm can sustain its recent recovery from years of underperformance, and whether it can hold back an "existential" challenge from a new technological rival.

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