Softbank buys up Arm shares to boost stock market value

Softbank buys up Arm shares to boost stock market value

Softbank has acquired the stake in subsidiary Arm from its own start-up investment fund Vision Fund. The deal should bring Arm’s market capitalization to the desired $64 billion.

Softbank has struck a deal to acquire all Arm shares from its investment vehicle Vision Fund, reports Reuters. Parent company Softbank is making this move just in time, it appears. Arm is expected to officially announce today that it is going public.

Vision Fund held a 25 percent stake in the chip technology developer. This large stake was given to the investment fund after Softbank privatized Arm in 2016. Vision Fund paid $8 billion for this at the time.

Impact on IPO

The now-executed deal will possibly affect the IPO, experts expect. Possibly, Softbank will sell fewer shares of Arm at the IPO as a result. It is estimated that the parent company will keep 90 percent of the shares.

Vision Fund planned to sell all of its own shares in the Arm IPO, while Softbank wants to remain a longer-term investor.

In addition, experts expect the capital return Arm hopes to raise from the IPO to be lower. It was previously hoped for between $8 billion and $10 billion.

Read also: Arm wants IPO of at least 60 billion in September