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SoftBank nets $16 billion on Arm earnings pop, exceeding its total losses in WeWork


Billionaire Masayoshi Son, chairman and CEO of SoftBank, owner of Arm, speaks during a news conference in Tokyo, July 28, 2016.

Tomohiro Ohsumi | Bloomberg | Getty Images

Masayoshi’s son SoftBank In Arm’s after-hours trading Wednesday, the total amount the company lost from its disastrous bet on now-bankrupt WeWork gained more.

Shares of Arm soared as much as 41% late Wednesday after the chip designer reported revenue and profits that beat analysts’ estimates. SoftBank took Arm public in September and still owns about 930 million shares, or about 90% of the chip designer’s outstanding shares.

Arm pared its initial gains, but SoftBank’s stake still jumped nearly $16 billion, from nearly $71.6 billion to $87.4 billion, after the results were released. Softbank acquired Arm in 2016 for $32 billion, and its shares were worth just over $47 billion at the time of the IPO last year.

Arm’s windfall follows a difficult period for SoftBank’s investment portfolio.

The company’s most high-profile bet was WeWork, which filed for bankruptcy in November after the office-sharing company spent years burning through billions of dollars in SoftBank cash at sky-high valuations. The Vision Fund, SoftBank’s venture capital arm, posted a $6.2 billion loss in the second quarter of 2023, linked to WeWork and other sour bets.

SoftBank told investors in November that its cumulative loss on WeWork exceeded $14 billion. In 2022, after a $32 billion loss in the Vision Fund, Son suggested that SoftBank would abandon aggressive investments and go into “defense” mode, selling its stakes in Ali Baba and is preparing to take Arm public. A little over a year later, as the hype around artificial intelligence intensified, Son said Softbank would return to “offensive” mode, continuing its investments in AI.

His son cannot yet enjoy his business earnings from Arm.

SoftBank is subject to a lock-up clause that prevents it from selling its Arm shares, with certain exceptions, for 180 days after the IPO. Arm went public in September, meaning the lockdown restriction expires in mid-March.

WATCH: Masa Son flexes his arm



Note: The content and images used in this article is rewritten and sourced from www.cnbc.com

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