Softbank Group Corp has not made a final decision on where to debut chip subsidiary Arm Ltd though the NASDAQ remained the most likely venue for an initial public offering (IPO), chairman Masayoshi Son said yesterday.
The Japanese investment giant is still considering its options, and is in talks with bankers and lawyers to float Arm in the US and the UK, Son told shareholders.
Softbank is weighing the listing of some of its stake in the British chip designer on the London Stock Exchange, switching from an earlier plan to only use the US market, Bloomberg News has reported.
Arm, which Softbank acquired in 2016, is based in Cambridge, England. It was one of the UK’s most important technology companies before the purchase and still has the majority of its operations there.
An IPO that would list only in the US would be a blow to the UK government and capital market.
Softbank founder Son is used to praise and encouragement from shareholders. However, the company’s loss of US$34 billion in market value over the past year is a test for even his most faithful admirers when they gathered for yesterday’s annual shareholders’ meeting.
Investors stuck by Son when Softbank announced a holding company strategy in 2015 to hive out its staid, but profitable local telecom business to become the world’s largest investor in volatile tech start-ups.
When the Vision Fund booked an US$18 billion loss on investments like WeWork and Uber Technologies Inc in 2020, they pointed to Son’s ability to win thousands-fold returns on Alibaba Group Holding Ltd (阿里巴巴). When Son preached patience as the stock began a downward trajectory from a March peak last year, they listened and hung on.
However, five years of deploying US$142 billion has now resulted in a record ￥2.1 trillion (US$15.6 billion) loss for the company in the quarter ended in March.
Much of that can be pinned on the recent global selloff in tech and a crackdown on China’s biggest technology companies, but much can also be attributed to Softbank’s pressure on companies to make big, aggressive bets.
With Softbank’s own financial health on the line, shareholder confidence is near a breaking point, said Mio Kato of LightStream Research.
Son needs to show how Softbank adds value as an investor and chart steps — such as further share buybacks financed by sales of Alibaba stocks—-- for the stock price to recover, he said.
“Investors remain loyal as long as they believe in your dream, but once they realize things aren’t working, trust crumbles in an instant,” Kato said.
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