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Published Sep 11, 2023

Arm’s IPO, Instacart’s Valuation, and Salesforce’s Year of Efficiency | Prof G Markets

Scott Galloway delves into Arm's significant IPO, unpacks Instacart's evolving valuation driven by advertising, and dissects how activist investors have influenced Salesforce's strategic focus on efficiency and profitability.
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  • IPO Valuation

    discusses the upcoming IPO of British chipmaker Arm, which is set to go public at a target valuation of $52 billion. He highlights Arm's dominance in the smartphone CPU market, with their chips powering 99% of the world's smartphones and being used in various other devices. Despite its strong market position, Arm's growth was flat last year, which could impact its valuation.

    Their growth was flat last year, which will hurt the valuation because of a slump in smartphone shipments.

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    Scott also points out that Arm's valuation is high compared to other chipmakers, raising questions about its ambitious $50 billion target 1 2.

       

    Market Impact

    The IPO of Arm is expected to have significant implications for the broader market. notes that SoftBank, which owns around 90% of Arm, has valued the company at $64 billion, 30% higher than the expected IPO valuation. This discrepancy highlights the challenges SoftBank faces in recouping its investment.

    They need to move shares at some point out and recognize valuation for them. And the market has just changed dramatically.

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    Scott also mentions that the Vision Fund, SoftBank's tech-focused venture fund, may struggle to raise money due to its poor performance, further complicating the situation 3 4.

       

    SoftBank's Role

    SoftBank's financial strategies and historical performance play a crucial role in Arm's IPO. criticizes SoftBank's investment decisions, calling Masayoshi Son, the CEO, one of the worst investors in history. He argues that SoftBank's high valuation of Arm is unrealistic and that the company is unlikely to recoup its investment anytime soon.

    Masayoshi san is the worst investor in history. He got incredibly lucky on his stake in Alibaba, and let's be honest, that was luck.

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    Scott also points out that the Vision Fund's poor performance makes it difficult for SoftBank to attract new investors, further complicating their financial situation 2 4.

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