Softbank says ARM acquisition is crucial for new tech era

The chairman of Japanese telecommunications giant Softbank, Masayoshi Son, justified the acquisition of British chip designer ARM Wednesday, saying it is key to the company’s plans of playing a pivotal role in the era of the “internet of things.”

“SoftBank has made major investments at the beginning of each paradigm shift,” argued Son in favor of the controversial purchase of ARM, in an interview published in the financial daily Nikkei.

Softbank stocks plunged 10.32 percent at the Tokyo Stock Exchange Tuesday, amid apparent disappointment in the market over the company’s decision to buy the British firm for around $31.14 billion.

Analysts had expected the company to employ the liquidity gained from the recent sale of its stake in companies such as the Finnish videogame developer Supercell, to check its burgeoning debt or to carry out a share buyback to push up the value of shareholders’ portfolios.

The Softbank chief justified the ARM acquisition, saying tech companies’ survival in the approaching era of the socalled “internet of things” will depend on their ability to gather and analyze big data using semiconductors such as those designed by ARM.

Terming ARM a “platform provider,” he said it is the type of firm whose turnover and profits tend to expand with time.

His comments seem to have allayed investor fears somewhat with Softbank bonds recording a rise of 0.33 percent in Tokyo.