What will shutting down Arm acquisition mean for Nvidia's share price?

It’s official, the deal proposed in September 2020 was set to be finalized by March 2022, but Nvidia’s [NVDA] acquisition of Arm will no longer be going through.

This article was originally written by MyWallSt. Read more insights from the MyWallSt team here.

With approval needed from regulators in the U.S., the U.K., and China, it was never going to be as straightforward as it seemed.

It really doesn’t matter though…

There’s no doubt it was a longshot to seal the largest chip deal in history. For Nvidia however, it doesn’t make a huge difference to its future plans.

Even in the last number of months — and days — investors are rethinking FAANG. Netflix [NFLX] more or less has already been kicked to the side of the curb, with Microsoft [MSFT] the obvious replacement. As uncertainty surrounds Facebook [FB] and its metaverse ambitions, we could see a new replacement in Nvidia, and the chipmaker has even leapfrogged the social media giant in market cap over the last week.

In no way, shape, or form does it affect the existing relationship between Nvidia and Arm either — both will continue working together on 5G, supercomputing, and AI technologies. Nvidia CEO Jensen Huang stated “we’ll continue to support them as a proud licensee for decades to come,” and “though we won’t be one company, we will partner closely with Arm”.

And there’s another silver lining from all of this. Nvidia can hang on to the $12 billion in cash it was forking over as part of the deal.

Even still, it’s not all bad news if you were excited to get in on the Arm’s potential; the deal going belly up means the chip processor will be going public instead. CEO Rene Haas is now eyeballing a potential IPO for April, saying “we’ll go as quickly as we can,” — even if the potential outcomes aren’t quite as exciting.