SoftBank founder Masayoshi Son said the Nasdaq remained his “favorite” place for the planned listing of Arm despite an intense pressure from the UK for a stock offer in London from the designer of British chips.
The Financial Times reported this week that the UK government has debated the use of national security legislation to force SoftBank to arm Arm in London as the world’s largest technology investor reconsiders making an initial public offering for to the company exclusively in the USA.
“Nasdaq is the favorite,” Son said at SoftBank’s annual shareholder meeting in Tokyo when asked where he planned to include Arm. The comments were his first public comments on the subject since the UK campaign began in February.
He added that most of the chip designer’s clients were in Silicon Valley and that “on US stock markets they would also love to have Arm.”
But the 64-year-old billionaire acknowledged that the group had “received a strong call for love” from London and was consulting with experts on what would be Arm’s best interest and where regulations would be most favorable. The son said nothing had been decided.
Prime Minister Boris Johnson has sent a letter to SoftBank executives, while British Investment Minister Lord Gerry Grimstone has met with the group’s executives to push for the listing.
Pointing to Arm’s image as the UK’s success story has become a very sensitive political issue following criticism that the UK was no longer an attractive place for major companies worldwide.
SoftBank bought Arm in 2016 for $ 32 billion. The Cambridge-based company was listed in Britain at the time, with a secondary listing in the US. A planned sale to California-based Nvidia collapsed this year due to regulatory concerns, prompting Son to reconsider a public listing.
A successful bid with a target valuation of at least $ 50 billion would be important to boost SoftBank’s finances after its Vision Fund reported a historic annual investment loss of 3.5 trillion yen (27 billion yen). dollars) last month. Companies in its portfolio were affected by regulatory crackdown in China and a sale of technology stocks.
Reflecting these pressures, rating agency Moody’s has cut SoftBank’s credit outlook from “stable” to “negative”, citing a drop in the value of its portfolio and estimating that SoftBank’s leverage has increased.
Moody’s said the collapse in the sale of Arm to Nvidia “shows the challenges to quickly realizing the full value of those stakes.” He added that SoftBank’s plans to list Arm “face the risk of foreclosure at the time and valuation.”
SoftBank said Moody’s assessment was “based on its assumptions and subjective assumptions with no reasonable basis to support.”
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In contrast to a gloomy earnings presentation in May, during which Son outlined a shift to a more defensive stance, the SoftBank chair on Friday tried to project confidence.
“Since the start of my business, I have never had any doubts for a day that the information revolution will come,” Son said.
To illustrate the point, he presented slides showing SoftBank’s growth reflecting the increase in Internet traffic over the years and predicted that the trend would continue.
“I believe in the vision of future progress and I invest in it. . . it will come for sure, ”said Son.
Shares of SoftBank have fallen about a third since last year’s annual meeting, but Son urged shareholders to take a long view:
“Peaches and chestnuts take three years and persimmons take eight years, even fruits take so long,” he said, citing a Japanese proverb. “I’m sure if you wait five to ten years there will be something delicious.”
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