It’s time for an updated edition of “Games People Play,” one dedicated to IPO marketing. The prime example could be SoftBank and the army of bankers it has on tap that are marketing the IPO for chip design firm Arm. They’re doing a masterful job in manipulating what the media thinks SoftBank wants. A few weeks ago, we saw reports that SoftBank was hoping Arm would be valued at between $60 billion and $70 billion, an idea buttressed by a $64 billion value put on Arm in a recent SoftBank–Vision Fund transaction. Today, though, as the IPO marketing roadshow kicked off, Arm released numbers showing it is targeting a value of up to $52 billion. Predictably, some news outlets interpreted this as the IPO falling short of SoftBank’s expectations.
That may very well be the case. After all, SoftBank CEO Masayoshi Son sometimes seems to exist in a parallel universe to the one the rest of us inhabit (perhaps he’s renting one with Adam Neumann and Elon Musk). So it’s possible he seriously thought Arm could be worth more than $60 billion. But it’s also possible the opposite is true: that he (or his advisers, at least) know a reasonable price for Arm is closer to half that, or around $30 billion. With that in mind, perhaps they think if they put out the idea that they want north of $60 billion, later suggesting a price of around $50 billion would appear to be a big concession to skeptics of the higher number. Will anyone be fooled (aside from some reporters)? Well, one report today quoted an investor saying the lower valuation was “more palatable than initially discussed.”