Arm shares jump again after big IPO

0 2

Arms accumulation continues after IPO

Arm Holdings jumped another 6% Friday at the market open, continuing its rally after its Nasdaq debut this week.

Shares of the British chip designer were trading at just over $67 around the market open, implying a valuation of more than $72 billion. Arm shares were even higher earlier but offset some of these gains.

It comes after Arm shares rallied nearly 25% on the company’s first day of trading on Thursday. Shares for its blockbuster IPO were priced at $51 each, valuing the company at about $54.5 billion.

With the rally underway, Arm continues to trade at a premium to chip giant Nvidia, even as its upside continues to grow. Some analysts have expressed concerns about the valuation.

“The price is expensive… I think a lot of investors think in terms of…

Bank Softwhich Arm acquired in 2016, floated around 10% of the company, with the Japanese giant maintaining 90% ownership.

SoftBank has faced criticism over its investment strategy with its big tech investment arm Vision Fund posting a huge loss in its last fiscal year. This has been enough to put off some investors from the Army IPO.

You could say that Arm is 'dangerously overvalued,' the analyst says

William de Gale, a portfolio manager at BlueBox Asset Management, said he did not invest in ARM.

“Ultimately, we decided we were too concerned about corporate governance with SoftBank still controlling the company with a questionable record for asset allocation,” de Gale told CNBC’s “Street Signs Europe” on Friday. .

“So we wanted to watch from the sidelines to see how the company works as an independent business. “

However, there was strong demand for shares, with several reports this week ahead of the initial public offering suggesting the listing was many times oversubscribed.

Arm, whose chip architecture is in 99% of the world’s smartphones, has managed to secure strategic investors including Apple and Nvidia to buy shares in the listing.

Much focus this week has been on some of the risk surrounding the company including its exposure to China and competition arising from a rival semiconductor architecture, backed by some of its customers Army’s biggest.

For his part, Army CEO Rene Haas told CNBC on Thursday that the company’s China business is “doing well” with strong potential in data centers and automotive applications.

Smartphones and other consumer electronics have generally been arm strength. But the company is now looking to new areas including artificial intelligence to grow its business.

“We changed our business. We’ve had huge growth in the cloud data center and in cars,” Hass said.

Arm valuation is one of the risk points for many investors, the analyst says
Leave A Reply

Your email address will not be published.