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Softbank bought ARM in 2016 and paid $32B ($35B of 2020 USD after 4 years of inflation). And today they get $40B but partly in Nvidia stocks... Assuming that

by llsf 6y ago

Softbank bought ARM in 2016 and paid $32B ($35B of 2020 USD after 4 years of inflation). And today they get $40B but partly in Nvidia stocks... Assuming that Softbank manages to sell immediately the Nvidia stock and get their $40B, it is more like 14%. In the same timeframe Nvidia stock went from $30 (Jan. 2016) to $480 (Friday) or x16. Softbank would have a way better outcome if they had invested in Nvidia 4 years ago, than investing in ARM. The potential 14% they got over last 4 years, is not great.

TomVDB 6y ago
Softbank acquired 4.9% of Nvidia for $4B in May 2017. They sold it in February 2019 for $3.6B (according to this https://www.cnbc.com/2019/02/06/softbank-vision-fund-sells-nvidia-stake.html https://www.cnbc.com/2019/02/06/softbank-vision-fund-sells-n...). Another hilarious example of Softbank's market timing expertise. Compared to other investments, an ARM sale of $40B would be a home run...
- TylerE 6y ago
  I wonder what the return would be just taking the opposite position of everything Softbank does is...
- llsf 6y ago
  Sure, compare to negative return, 14% in 4 years is nice. Still it is a return of 3.3% per year. Nice, but not great. I was relativizing the return. Clearly, during that 2016-2020 period, pretty much any major tech stock would have do way more than 14%. Clearly Softbank did not time it correctly.
jb775 6y ago
Hindsight is 20/20 in regards to the Nvidia stock gains. $5-$8 billion profit plus whatever they managed to extract in-between is a pretty astounding investment.
- manquer 6y ago
  Perhaps the how much of nvidia stock gains are 20/20 . It was never in doubt that nvidia was going to grow massively. 3-4 years back cryptocurrency mining made it next to impossible to actually buy a gpu. Machine learning was always going to keep growing massively. Cuda had cornered the market . AMD GPU is far behind . Similarly AMD's growth is never in doubt after ryzen launched , there is nothing on intel's next 3-5 years that is going to be remotely competitive. They can only compete by the sheer force of their sales . AMD will only keep growing next 5 years, by how much depends on how well they can execute their own sales.
  - techdragon 6y ago
    It’s worth remembering that a significant percentage of CUDA users are unhappy with the nVidia lock-in and also that the AMD GPUS are capable enough to do the work. So should any of the efforts to break the CUDA lock-in succeed... nvidia is likely to lose a significant percentage of their machine learning business. The only people I’ve ever met that actually love nVidia, are enthusiast PC gamers and that’s because the games are optimised for nVidia due to nVidias anticompetitive efforts in the game development space.
    - manquer 6y ago
      Nobody loves oracle either. They still buy It is just not the developers either, even the bean counters hate them. There is always constant chatter they will replace nothing actually happens. Developer happiness is not how most of enterprise sales happens. Most of the big cloud vendors today only offer Nvidia GPUs . Unless AMD GPUs can become so much better that nvidia is left behind nobody is going to change. Cost of change is enormous in large organizations . This why intel is and will still make money even though they are behind in tech in almost all parameters. That is actually when they are behind , AMD has nothing on the horizon to actually beat nvidia. I don't buy nvidia GPUs because I like it, I buy them because the total cost of ownership of investing in a stack everyone uses is cheaper. Hiring is easier , cloud and library support is great, lesser bugs that is already not been seen and handled before. The only reason it will make financial sense is if either Nvidia is so expensive that it is worth exploring alternatives or AMD is offering something radically different that the effort in going a different path can generate a lot of biz value. Neither is applicable today or next few years

by llsf 6y ago

TomVDB 6y ago

Softbank acquired 4.9% of Nvidia for $4B in May 2017. They sold it in February 2019 for $3.6B (according to this https://www.cnbc.com/2019/02/06/softbank-vision-fund-sells-nvidia-stake.html https://www.cnbc.com/2019/02/06/softbank-vision-fund-sells-n...). Another hilarious example of Softbank's market timing expertise. Compared to other investments, an ARM sale of $40B would be a home run...

TylerE 6y ago
I wonder what the return would be just taking the opposite position of everything Softbank does is...
llsf 6y ago
Sure, compare to negative return, 14% in 4 years is nice. Still it is a return of 3.3% per year. Nice, but not great. I was relativizing the return. Clearly, during that 2016-2020 period, pretty much any major tech stock would have do way more than 14%. Clearly Softbank did not time it correctly.

jb775 6y ago

Hindsight is 20/20 in regards to the Nvidia stock gains. $5-$8 billion profit plus whatever they managed to extract in-between is a pretty astounding investment.

manquer 6y ago
Perhaps the how much of nvidia stock gains are 20/20 . It was never in doubt that nvidia was going to grow massively. 3-4 years back cryptocurrency mining made it next to impossible to actually buy a gpu. Machine learning was always going to keep growing massively. Cuda had cornered the market . AMD GPU is far behind . Similarly AMD's growth is never in doubt after ryzen launched , there is nothing on intel's next 3-5 years that is going to be remotely competitive. They can only compete by the sheer force of their sales . AMD will only keep growing next 5 years, by how much depends on how well they can execute their own sales.
- techdragon 6y ago
  It’s worth remembering that a significant percentage of CUDA users are unhappy with the nVidia lock-in and also that the AMD GPUS are capable enough to do the work. So should any of the efforts to break the CUDA lock-in succeed... nvidia is likely to lose a significant percentage of their machine learning business. The only people I’ve ever met that actually love nVidia, are enthusiast PC gamers and that’s because the games are optimised for nVidia due to nVidias anticompetitive efforts in the game development space.
  - manquer 6y ago
    Nobody loves oracle either. They still buy It is just not the developers either, even the bean counters hate them. There is always constant chatter they will replace nothing actually happens. Developer happiness is not how most of enterprise sales happens. Most of the big cloud vendors today only offer Nvidia GPUs . Unless AMD GPUs can become so much better that nvidia is left behind nobody is going to change. Cost of change is enormous in large organizations . This why intel is and will still make money even though they are behind in tech in almost all parameters. That is actually when they are behind , AMD has nothing on the horizon to actually beat nvidia. I don't buy nvidia GPUs because I like it, I buy them because the total cost of ownership of investing in a stack everyone uses is cheaper. Hiring is easier , cloud and library support is great, lesser bugs that is already not been seen and handled before. The only reason it will make financial sense is if either Nvidia is so expensive that it is worth exploring alternatives or AMD is offering something radically different that the effort in going a different path can generate a lot of biz value. Neither is applicable today or next few years