How much is Arm Holdings really worth?

In 2016, SoftBank’s Masayoshi Son paid $32 billion for the Cambridge UK-based Arm Holdings, a 43% premium over the stock’s price and a multiple of 48-times expected earnings.

Apple's Arm-based A13 Bionic SoC
Apple’s ARM-based A13 Bionic SoC is fabricated by TSMC

Alec Macfarlane for Reuters:

SoftBank Group boss Masayoshi Son once called Arm Holdings his most important acquisition. Since the $128 bln Japanese group bought the UK chip designer four years ago, however, businesses have been hived off and sales growth and operating profit have underwhelmed.

Arm licenses its chip designs to brands including Apple and Qualcomm. They are used in most of the world’s smartphones. Son’s dream, however, was that Arm-based chips would one day be used in everything from running shoes to milk containers… The mega internet-of-things bet has so far largely disappointed… Sales grew a paltry 2% in the fiscal year to March, to 207 billion yen ($1.9 billion), and the business booked an operating loss of 43 billion yen.

Son is mulling options including an outright sale or an initial public offering, the Wall Street Journal reported, citing sources. Valuing Arm today will be tricky… Arm could be worth anything between roughly $6 billion and $40 billion.

MacDailyNews Take: The spread on Macfarlane’s estimated value of Arm exceeds SoftBank’s purchase price!

Perhaps Apple AR glasses (and their inevitable clones) will be the catalyst for IoT? When you can look at your running shoes and see how many miles/kilometers are on them in your Apple Glasses, like an odometer – perhaps a slew of ordinary-yet-useful capabilities like that will spur sales of IoT products?


    1. The UK are sellouts since once Thatcher came to power, they don’t want to make anything unless it’s a finance derivative. The Germans are leaving them in the Yugo lane….

  1. How do you manage an operating loss of 1.9 Billion when you don’t manufacture anything?
    Are they paying their engineers that much, or are they paying their owner that much even though he is not doing anything.

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