This article first appeared on GuruFocus.
SoftBank Group Corp. (SFTBY, Financials), the Japanese investment group controlled by Masayoshi Son, is getting more financial firepower from one of its most valuable holdings.
The company has reportedly increased a margin loan backed by Arm Holdings shares by $5 billion, bringing the facility to $25 billion.
It is the third expansion since the loan began at $8.5 billion in 2023. SoftBank increased it to $13.5 billion in 2024 and $20 billion last year. Arm’s rally has made that possible.
The chip designer’s shares have climbed 142% this year, increasing the value of SoftBank’s stake and attracting more interest from lenders. SoftBank owns nearly 90% of Arm.
As of May, 769 million Arm shares, representing about 72% of the chipmaker, backed the loan.
The additional borrowing capacity arrives as Son commits increasingly large sums to AI.
SoftBank has pledged $60 billion to OpenAI and is pursuing other investments tied to AI infrastructure and data centers, businesses that can require enormous amounts of capital before generating returns.
Arm’s rise is therefore doing more than increasing SoftBank’s asset value.
It is giving Son additional room to finance his AI strategy. The next thing investors need to watch is how much further SoftBank is willing to leverage that increasingly valuable stake.
https://finance.yahoo.com/technology/ai/articles/softbanks-ai-spending-spree-now-140215998.html?shem=aimgspc,
