SoftBank Group's stock price on the Tokyo Stock Exchange rose nearly 10% after Arm Holdings announced surprisingly optimistic earnings guidance.
Zhitong Finance learned that SoftBank Group's stock price on the Tokyo Stock Exchange rose nearly 10% after Arm Holdings (ARM.US) announced surprisingly optimistic earnings guidance, which exceeded analysts' expectations, as the company's business other than smartphones drove growth. Arm said that in the three months ending March, revenue will reach 850 million to 900 million US dollars, far higher than analysts' average expectations of 778 million US dollars. Shares of the British chip design company soared 24% in after-hours trading, bringing the company's market capitalization close to $100 billion. When the chip design company Arm went public last year, SoftBank held about 90% of the company's shares.
Prior to Wednesday's rebound, Arm's stock price rose 40% in the December quarter of last year, possibly making SoftBank's net asset value more than 18 trillion yen (121 billion US dollars). This is one of the indicators favored by Sun Zhengyi to measure the health of this investment company. The chip design company is currently the largest single asset in SoftBank's portfolio, accounting for an estimated one-third of total assets.
Although the rise in Arm's stock price had no direct impact on the Japanese company's profits, the increase in the company's valuation increased the possibility that Sun Zhengyi would consider new asset-backed financing to finance new investments. SoftBank is due to announce earnings for the December quarter later on Thursday. After a series of brutal setbacks, the Japanese tech giant is expected to have its strongest quarter in years, including possibly making a profit for the first time in more than a year.