We’ll keep an eye on this IPO

Article Excerpt

SOFTBANK GROUP CORP. ADR $18 is a hold. Based in Japan, the company (Over-the-counter Pink Sheets symbol SFTBY; ADRs outstanding: 3.45 billion; Market cap: $62.1 billion; Divd. yield: 0.9%; Takeover Target Rating: Medium; www.softbank.jp) is a conglomerate with holdings in the communications, banking and technology industries. SoftBank is now preparing to offer the public sell shares in its U.K.-based business Arm Ltd. Arm designs energy-efficient chips to power mobile phones, tablets, watches and a wide variety of other devices. In September 2020, the company agreed to sell Arm to U.S.-based chip designer Nvidia Corp. (Nasdaq symbol NVDA) for up to $40 billion in cash and shares. However, the two firms cancelled the sale as they were unable to secure the necessary regulatory approvals. Now, the IPO will probably raise $8 billion for SoftBank. It’s also likely Arm’s shares will trade on a U.S. exchange. However, chip demand is cyclical, and SoftBank will likely have to wait until market and economic conditions improve to launch the offering. SoftBank is…