>The deal increased in value to $87bn only because NVDA’s stock price increased that much.

I get what you’re saying, but in practice, NVDA was essentially issuing x shares to buy ARM. They could do the same thing, sell them, and keep the cash. The rising stock price very much did raise the “real” cost to NVDA, it just wasn’t a simple cash charge.

Put alternatively, NVDA basically said to ARM “you’re worth x% of our company.” While that may be true at one date, a deal struck at the new market cap would be unlikely to come to the same conclusion.

Yeah, NVDA could sell the shares on the market, and buy with cash. In practice, selling that many shares tends to cause downward pressure on the stock price. But it is an option.

That said, Nvidia was still trying hard to make the deal work, even at that price. Jensen strongly believed the deal would be worth many multiples of the acquisition cost.

Yeah, without going too much into ad hominem, Jensen has been rewarded for not giving AF about what the markets think and focusing on R&D-heavy innovation (seriously listen him talk about how short-sighted the market is being about GPUs in 2012-2014).

The counterpoint ofc being (with Facebook/Meta being a great example), just because a CEO was once a visionary doesn't mean they are infallible.

The real cost to Nvidia is $87bn. Value is denominated in dollars, not nvidia stock.

If the value is denominated in dollars, why did the acquisition price go up from 40B to $87B as the price of the stock rose?

From the source:

https://nvidianews.nvidia.com/news/nvidia-to-acquire-arm-for... "The number of NVIDIA shares to be issued at closing is 44.3 million" [this is the pre-split amount]

If I agree to sell you my house in 10 years, and ten years later the house is worth 10x as much, but every other house is only worth twice as much did the value of the deal change?