3 ms·
>The deal increased in value to $87bn only because NVDA’s stock price increased that much. I get what you’re saying, but in practice, NVDA was essentially issu
by RC_ITR 5y ago
>The deal increased in value to $87bn only because NVDA’s stock price increased that much.
I get what you’re saying, but in practice, NVDA was essentially issuing x shares to buy ARM. They could do the same thing, sell them, and keep the cash. The rising stock price very much did raise the “real” cost to NVDA, it just wasn’t a simple cash charge.
Put alternatively, NVDA basically said to ARM “you’re worth x% of our company.” While that may be true at one date, a deal struck at the new market cap would be unlikely to come to the same conclusion.
- ZetaZero 5y agoYeah, NVDA could sell the shares on the market, and buy with cash. In practice, selling that many shares tends to cause downward pressure on the stock price. But it is an option. That said, Nvidia was still trying hard to make the deal work, even at that price. Jensen strongly believed the deal would be worth many multiples of the acquisition cost.
- RC_ITR 5y agoYeah, without going too much into ad hominem, Jensen has been rewarded for not giving AF about what the markets think and focusing on R&D-heavy innovation (seriously listen him talk about how short-sighted the market is being about GPUs in 2012-2014). The counterpoint ofc being (with Facebook/Meta being a great example), just because a CEO was once a visionary doesn't mean they are infallible.