$16 billion! The money lost by WeWork, Son Masayoshi earned back from Arm in just one day
After the release of the earnings report, with the rise in stock price, SoftBank, a major shareholder of Arm, saw the value of its holdings increase by nearly $16 billion, from around $71.6 billion to $87.4 billion.
Arm's latest financial performance exceeded analysts' expectations, causing its stock price to soar 41% after hours on Wednesday. This allowed SoftBank, owned by Masayoshi Son, to make more money in the Arm deal than the $14.3 billion it lost on the bankrupt WeWork.
On Wednesday, chip design company Arm announced that in the third fiscal quarter ending in December last year, its revenue was $824 million, higher than the expected $761.6 million; adjusted earnings per share were $0.29, higher than the expected $0.25. The revenue for the three months ending in March is expected to be between $850 million and $900 million, with an analyst consensus estimate of $778 million. The estimated earnings per share, excluding certain items, is about $0.30, significantly higher than the expected $0.21.
After the financial report was released, as the stock price rose, SoftBank, the major shareholder of Arm, saw the value of its holdings increase by nearly $16 billion, from nearly $71.6 billion to $87.4 billion. SoftBank acquired Arm for $32 billion in 2016 and currently holds approximately 930 million shares, accounting for 90% of Arm's issued shares.
In September last year, SoftBank took Arm public. Arm raised $4.9 billion in its IPO, making it the largest initial public offering on a U.S. exchange in 2023.
The surge in Arm's stock price finally allowed Masayoshi Son to breathe a sigh of relief. This is because the previously famous shared office space star WeWork filed for bankruptcy, leaving Son with a history of losing billions of dollars.
According to SoftBank's financial report for the second fiscal quarter released in November last year, the net loss for the quarter was 931.1 billion yen ($6.17 billion), marking the fourth consecutive quarter of losses, mainly due to the drag from WeWork. SoftBank stated that it incurred a total loss of 234.4 billion yen ($1.55 billion) in the first half of the fiscal year due to investments and financial support for WeWork. It is reported that SoftBank's cumulative losses on WeWork amount to $14.3 billion.