> They paid over the odds to take it private at $32Bn in 2016 at a time where they were just spewing money. 4 years later they think they can offload it to Nvidia for $40Bn
That’s just over 6% compounded annually for a $32 billion hardware company in a 0% interest environment. Those aren’t software numbers but to me it seems like a good investment. And remember - Nvidia was absolutely happy to make the purchase and the industry basically locked that shit down with antitrust litigation threats. The valuation of the company within Nvidia is drastically higher because it gives Nvidia leverage over their competitors and a foothold into other markets (remember Tegra? Yeah, they got their lunch eaten by other ARM SoC vendors).
The real problem with ARM is that they let a lot of the value be captured by their partners who make chips off that design. This is good for the industry, but suddenly 10x more valuable for a single competitor if they manage to acquire it.
Yes it was more than just thinking. However the firm commitment from NVidia was I think only $33.5 billion . The other $5billion was contingent on future performance (don't know the terms) and 1.5billion was for staff.
40Bn was a good price. But they didn't get it, and to then follow that up with various wildly inflated self-valuations in an era of interest rate rises...
That’s just over 6% compounded annually for a $32 billion hardware company in a 0% interest environment. Those aren’t software numbers but to me it seems like a good investment. And remember - Nvidia was absolutely happy to make the purchase and the industry basically locked that shit down with antitrust litigation threats. The valuation of the company within Nvidia is drastically higher because it gives Nvidia leverage over their competitors and a foothold into other markets (remember Tegra? Yeah, they got their lunch eaten by other ARM SoC vendors).
The real problem with ARM is that they let a lot of the value be captured by their partners who make chips off that design. This is good for the industry, but suddenly 10x more valuable for a single competitor if they manage to acquire it.