SoftBank Shares Jump Higher After Filing of Arm's Nasdaq IPO
SoftBank Group Corp is a prominent Japanese tech company that has recently filed for a Nasdaq IPO for its 'Arm' unit. This division of the Softbank group is involved in chip design & thus holds significant importance for the company.
The IPO filing on the Nasdaq exchange was long-awaited by the market players, which is the main reason why Softbank shares jumped higher in the stock market.
As per the details, Arm has filed for registration with the SEC, allowing it to become listed on the Nasdaq exchange. However, the firm didn't reveal how exactly how many shares they plan to list on the exchange. In addition, we also don't know anything about the initial valuation of the shares.
If we look back, Softbank faced several delays in an attempt to list Arm on the NY Exchange. And let's not forget that at one time, the company was also planning to sell Arm to another tech company for $40 billion. However, that didn't go through, and now we are here with the news of an IPO.
Experts believe that Arm will benefit immensely from this listing since Apple, Nvidia, and other tech companies utilize its designs. Basically, Arm receives royalties whenever a chip containing tech device is sold by these companies.
Overall, the shares of Softbank jumped by 3%, which also helped the Nikkei 225 to register a 0.7% upside. If we look back, not everything is great for Softbank as its valuation was dropped by several big players.
In fact, Softbank has registered losses for 6 quarters in a row as the high-interest rates have affected the value of several holdings. However, the Arm division remains one of the areas which is a shine of light for the Softbank portfolio.
And let's not forget that the chip industry is expected to go through a cyclical downturn which will also affect Softbank's Arm division.