The recent rise in share price has been attributed to the IPO success of Arm, which SoftBank acquired in 2016. SoftBank owns roughly 90% of Arm, whose shares are up nearly 124% this year. However, some analysts suggest that SoftBank's share price does not reflect its fair value, considering its various holdings and businesses. The company's valuation is around $101.5 billion, while Arm's market capitalization is around $176 billion, meaning that SoftBank's 90% stake is equivalent to about $158 billion.
Key takeaways:
- SoftBank Group shares hit a record high on June 20, 2024, due to signs of recovery in its tech investment arm and the public market success of British chip designer Arm, in which Softbank has a majority stake.
- SoftBank's recent rise to a share price peak has been volatile since the launch of its massive technology investment arm, the Vision Fund, in 2017. The fund posted record financial losses in 2022 but has shown signs of recovery since May 2023.
- Several analysts attribute SoftBank's recent share price bump to the IPO success of Arm, which it acquired in 2016. SoftBank owns roughly 90% of Arm even after the listing, and Arm shares are up nearly 124% alone this year.
- Despite the recent success, some analysts believe that SoftBank's share price does not reflect its fair value, citing the company's valuation of around $101.5 billion compared to Arm's market capitalization of around $176 billion.