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After The IPO, SoftBank Intends To Keep Control Of Arm

SoftBank is now opting for an IPO for at least a $60 billion valuation due to its failure to reach Arm sale consensus with Nvidia Corp.

After The IPO, SoftBank Intends To Keep Control Of Arm

Even after the publicised IPO of software and semiconductor design company Arm Ltd, SoftBank Group Corp looks to hold on to the major stake in the company. 

Since acquiring Arm in 2016, SoftBank is now opting for an IPO for at least a $60 billion valuation due to its failure to reach a sale consensus with Nvidia Corp. Sources close to SoftBank reveal that recent dips in chip stock prices and a pragmatic hopefulness for higher future valuation led to this decision. 

Using shares of Arm as collateral, SoftBank raised an $8 billion term loan from 11 lenders, including big players like JPMorgan Chase & Co., BNP Paribas, and Barclays Plc, to give itself enough financial resources to retain a larger portion until the market conditions have eased. 

Although the IPO is likely to take place during Q1 of next year, the terms of the offer are subject to variations. 

Arm Ltd. is a company that licenses and sells semiconductor technology used in all kinds of products ranging from smartphones to supercomputers. The ubiquity of its products has made its IPO the most anticipated in the chip industry.

CEO Masayoshi Soni, in a move to break into new markets, gave Arm Ltd the financial freedom to hire new talents after acquiring them for $32 billion. 

Investors are shy of chip stocks this year even though the industry and demand for chips are steadily on the rise. Many are vary about the lack of necessary components, which may disrupt the supply chains unless production is increased. 

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