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ARMs IPO value is under $10B, revenue/profits too small, growth not strong enough.
by valuearb 6y ago
ARMs IPO value is under $10B, revenue/profits too small, growth not strong enough.
- walterbell 6y agoWhy would Arm be valued at $10B publicly and $32B+ privately? Nvidia shareholders would be paying a premium for ... what exactly? Did Softbank overpay for Arm? Is Arm not profitable as a standalone business? They recently raised some license fees by 4X.
- valuearb 6y agoI don’t believe NVidia will pay $30B. But certainly they might believe ARM has value outside its current cash flow and mediocre growth. Like strategically combining technologies. I’m skeptical that will work, but Son was dumb enough to pay $31B with no strategic value.
- goatinaboat 6y agoI’m skeptical that will work, but Son was dumb enough to pay $31B with no strategic value. At the time I thought Son had clever telco synergies in mind, but I gave him far too much credit
- bsder 6y agoARM is actually an okay choice and $31B probably wasn't even that out of whack. The problem is that Son needs cash, so he's flogging off everything he can to get it.
- ece 6y agoApparently Son had a stake in Nvidia too which was sold off last year at a slight loss if you believe BI. Crazy. https://www.businessinsider.com/running-list-softbank-investments-2017-7 https://www.businessinsider.com/running-list-softbank-invest...
- selectodude 6y ago>Softbank overpay for Arm Grossly so. They paid like 45 percent above what the stock was trading at the time.
- throwaway5792 6y agoThat's a pretty normal premium for a buyout. You'll never be able to buy a company completely just by using the stock price * number of shares.
- Followerer 6y agoThe company is currently valued by analysts as high as $40 billion. Most seem to believe it's worth more than the $32bn Softbank paid in 2016.
- kllrnohj 6y ago> Nvidia shareholders would be paying a premium for ... what exactly? They'd be paying a premium for a path to an all-nvidia datacenter & supercomputer. Consider HPC applications like Oak Ridge's Frontier supercomputer. They went with an all AMD approach in part due to AMD's CPUs & GPUs being able to talk directly over the high-speed Infinity Fabric bus. Nvidia's HPC GPUs can't really compete with that, since neither Intel nor AMD are exactly in a hurry to help integrate Nvidia GPUs into their CPUs. This makes ARM potentially uniquely valuable to Nvidia - they can then do custom server CPUs to get that tight CPU & GPU integration for HPC applications.
- walterbell 6y agoCan't they make custom Arm server CPUs without buying Arm, as the Amazon/Annapurna team and others have done with their Arm licenses? Amazon paid 350MM for Annapurna, ~ 1/100th of 32B. For embedded devices, Nvidia already ship Jetson boards with Arm CPUs and Nvidia GPUs.
- kllrnohj 6y agoSure, but they'd need to buy or build a CPU design team. Which they'd get as part of buying ARM, the teams that make the Cortex reference designs.
- walterbell 6y agoA $30B acquihire would be impressive, 100 times more than Amazon paid for Annapurna, the team who built AWS Graviton server CPU on top of Arm's reference design. If the HR department is having so much trouble hiring Arm engineers that Nvidia needs to pay 30 billion dollars to hire a CPU design team, something's wrong. Nvidia already has CPU design teams, e.g. they made a 2014 Transmeta-like design. https://hothardware.com/news/nvidias-64bit-tegra-k1-the-ghost-of-transmeta-rides-again https://hothardware.com/news/nvidias-64bit-tegra-k1-the-ghos... > .. this chip is fascinating. NVIDIA has taken the parts of Transmeta's initial approach that made sense and adopted them for the modern market and the ARM ecosystem -- while pairing them with the excellent GPU performance of Tegra K1's Kepler-based solution. https://www.extremetech.com/computing/174023-tegra-k1-64-bit-denver-core-analysis-are-nvidias-x86-efforts-hidden-within https://www.extremetech.com/computing/174023-tegra-k1-64-bit... > there’s an interesting theory ... that Denver is actually a reincarnation of Nvidia’s plans to build an x86 CPU, which was ongoing in the mid-2000s but never made it to market. To get around x86 licensing issues, Nvidia’s chip would essentially use a software abstraction layer to catch incoming x86 machine code (from the operating system and your apps) and convert/morph it into instructions that can be understood by the underlying hardware. Which other Arm licensee has been talking about x86/Arm instruction morphing in 2020? If the goal of acqui-billion-hiring the Arm reference design team is to prevent other companies from using those designs, that would endanger smaller vendors in the Arm supply chain, along with many of the devices that run modern society. Regulators may not like that.
- beervirus 6y agoWhy would nvidia overpay by 22 billion dollars?
- valuearb 6y agoBecause the sources for this story are investment bankers desperate for bidders?
- ac29 6y agoAn ARM owned and fully controlled by NVIDIA is probably worth more to them than an independent and reasonably neutral ARM who's willing to do business with NVIDIA's competitors. Maybe not $22B more, though.
- walterbell 6y agoThat would imply the purchase is for the purpose of actions that could cause regulators in multiple countries to block the purchase.
- beervirus 6y agoThere’s an opportunity for arbitrage here then...
- tedunangst 6y agoNot really. You can't exactly cut in and buy arm from SoftBank for 16 and flip it to nvidia for 32. What's your pitch to SoftBank?
- beervirus 6y agoGet hired at arm with equity comp.