Doubling in four days! Earning 611.1 billion, Masayoshi Son, the richest man in Japan, completely turned over

Arm, who was almost sold by Son, has now become a face-saving "big killer" for him.

Affected by Nvidia and its performance, Arm's market value has more than doubled in three trading days, and SoftBank, which holds about 90% of Arm's shares, has become the biggest beneficiary of this wave of rise.

As early as June 2023, Son had told the outside world, "In the past few years, SoftBank has been focused on defense. Three years ago, SoftBank didn't have much cash flow on its books, but because it has been on the defensive, the group's cash has increased by 5 trillion yen. ”

As a result, he announced that the SoftBank Group would end its relative dormancy and launch an offensive in the field of AI.

Not only that, but Son also announced in a high-profile manner that SoftBank will soon launch a counteroffensive, hoping that SoftBank can lead the artificial intelligence revolution. Now, Son's "water reversal" seems to be over.

In fact, as Son judged, the upward trend of the global semiconductor boom cycle has begun, and the era of AI is coming.

I have to say that Son was right again.

Kanjian Finance believes that this round of Arm's skyrocketing price is mainly due to two factors:

First, since October 2022, Nvidia's stock price has risen by more than 500% as the global AI wave has swept through. As a leading global AI chip company, NVIDIA, which continues to refresh record highs, has become the object of the industry's pursuit.

Under the global semiconductor boom cycle, Goldman Sachs, Bank of America, and Morgan Stanley have raised their target prices for Nvidia. Goldman Sachs believes that investments in AI infrastructure, including governments and tech giants, will further boost Nvidia's revenue, so they raised their full-year earnings forecast for 2025-2026 by an average of 22%. In this context, Nvidia has continuously surpassed Amazon, Google and other companies to become the third largest company in the United States by market capitalization.

Second, recently, Arm released its financial results report for the third quarter of fiscal year 2024, which showed that the company's revenue in the third fiscal quarter was $824 million, a record high, a year-on-year increase of 14%, exceeding analysts' expectations of $760 million, and a net profit of $87 million, with adjusted earnings per share of $0.29, higher than analysts' expectations of $0.25.

Arm executives say the expansion strategy is starting to pay off.

Kanjian Finance believes that Arm may become Son's "finale", and he himself may re-establish his low position as a global investment master because of this transaction, drawing a successful end to his career.

Nearly sold Arm

Son's tragedy stems from his retirement plan in 2015.

Because of the incompetence of his successor, he had to sell Ali shares to hedge, and in the process of cleaning up the mess, Son fell deeper and deeper.

In 2017, in order to take SoftBank to the next level and regain the "glory" of investing in Alibaba, Son tried to persuade Saudi Arabia's sovereign fund to contribute money, raising a total of $100 billion to set up a vision fund.

To his surprise, his decision almost pushed SoftBank into the abyss.

Since the investment direction of the first phase of the Vision Fund is mainly the sharing economy, big mobility and AI, it is not surprising that he has invested heavily in Uber, WeWork and other leading companies in the industry.

According to SoftBank's financial report, in the three years since the establishment of the first phase of the Vision Fund, it has invested $70 billion and invested in a total of 88 entrepreneurial projects, including Didi Chuxing, Uber, OYO, WeWork and many other companies in the sharing economy field.

Under Son's "money power", SoftBank soon became the largest shareholder of companies such as Uber and WeWork. But what I never expected was that these companies would be miserable for Masayoshi Son.

Especially WeWork.

After the failure of WeWork's IPO plan, Mike Wilson, chief U.S. equity strategist at Morgan Stanley, commented: "The failure of WeWork's IPO marks the end of an era in which investors are no longer willing to pay for excessive investment and the days of generous funding for businesses that are not profitable are over." ”

In order to alleviate the cash flow of SoftBank Group, the first thing that came to Son's mind was to sell Alibaba's shares, but under this "black hole" loss, SoftBank almost liquidated Alibaba's shares, and Arm was also put on the shelf.

In 2020, SoftBank reached an agreement with Nvidia to sell Arm for $40 billion. At the time, Arm was one of Son's most valuable assets, and if Nvidia's merger was successful, it would be the world's largest chip merger and acquisition, as well as the largest asset sale in SoftBank's history.

However, due to regulatory opposition from the United States, the United Kingdom, and the European Union, the sale plan finally fell through in February 2022. As a result, SoftBank sought to re-list Arm.

In November 2022, Son announced that he would hand over the day-to-day work of the group to CFO Yoshimitsu Goto and other SoftBank executives, and that he would focus on chip company Arm in the future.

Masayoshi Son's "Bright Flowers"

Son's "waiting" in exchange for a good result.

On the 14th of 2023, Arm was listed on the NASDAQ, as the largest IPO project in the global technology field in 2023, Arm's IPO received the participation of 28 investment banks and was oversubscribed by more than 10 times, with a total of 95.5 million ADSs issued and $4.87 billion raised, and 10 companies including TSMC, Apple, NVIDIA, Samsung, Google, and Synopsys have become cornerstone investors.

As the controlling shareholder of Arm, SoftBank has reaped excess returns in its listing.

Son said that Arm is the future of SoftBank, and he is also sure that Arm's revenue will increase more than fivefold within five years.

Prior to this, SoftBank had acquired a 25% stake in Arm from its "Vision Fund" for $161 in August 2023.

As we all know, Arm's main business model is technology licensing.

Previously, many investment institutions were not optimistic about this company, believing that its growth space was limited. And some believe that in the long run, the growth of ARM's mobile phone processor business is facing challenges, and its attempts and layout in cloud computing processors, automotive chips, and AI have not formed a monopoly position.

Therefore, from the above dimensions, the market's perception of Arm seems to be divided.

Judging from the financial report disclosed by Arm, its patent licensing revenue grew strongly, achieving revenue of $354 million during the licensing period, a year-on-year increase of 18%.

Not only that, but Arm expects fourth-quarter revenue of $850 million to $900 million, also higher than the average analyst estimate of $778 million.

The company said it was expanding into new markets due to demand for artificial intelligence, and that its main smartphone business was recovering from the downturn.

Affected by the unexpected earnings report, Arm's stock price jumped 47.89% on February 8, soaring 104.12% in four trading days, and its market value exceeded $168 billion, and its market value has now fallen back to $129.949 billion. It is reported that SoftBank holds about 90% of Arm's issued shares, which means that the market value of Arm shares held by SoftBank has reached 116.95 billion US dollars, and according to its investment of 32 billion US dollars, Arm's income has made a profit of more than 84.95 billion US dollars (about 611.1 billion yuan), which means that all its losses in WeWork and Uber have been recovered.