The Lemon Fool

https://www.telegraph.co.uk/business/20 ... es-rocket/

"British semiconductor champion Arm has eclipsed the value of all but two FTSE 100 companies as shares rallied after it posted booming sales.
Shares in Arm were changing hands for more than $158 on Monday, up 33pc on its closing price on Friday, valuing the business at over $155bn (£123bn)."


"The Cambridge business, which was listed on the London Stock Exchange before it was taken private by Japan’s Softbank in 2016, designs critical technology used in billions of microchips - including smartphones and data centres.

Despite efforts from Rishi Sunak to lure the business back to the Square Mile, Arm opted for a bumper New York float which valued the business at around $55bn."


Looks like a good decision to list in the US rather than here! The article does go on to warn of shareprices being driven by an " AI Bubble".

We do not know what would have been the price had it listed here and in any case unless they want to raise more capital I am not sure that I understand the great benefit of a share price boosted by a bubble.

Dod101 wrote:We do not know what would have been the price had it listed here and in any case unless they want to raise more capital I am not sure that I understand the great benefit of a share price boosted by a bubble.

I have some question about the use of the word "bubble".

It is possible to make very valid arguments about the future of ARM. Maybe the future is not as bright as the past, or perhaps it is?

However it's history is a matter of pubic record. Without a doubt it has been a hugely successful company. Progressing from a spin off in the early days of hobby computers (once part of Acorn, who made the BBC computer) to the company that designs the chips used in most mobile phones, Apples desktop computers, Microsofts surface computer, Chromebooks and an increasing share of the data centre market.

It easily ranks among the likes of Intel and AMD.

I no longer own the shares, but did in their early days (before they were taken private) and still have a soft spot for the company.

Whenever someone mentions ARM I always think of our dear late friend Gengulphus who was one of the original founders. I also think of that abysmal woman Theresa May and her abysmal government who let Softbank steal the company from the UK market just to show the UK was “open for business” post Brexit. Where open for business. = draws down and bending over.

ARM was my most successful ever shareholding: a twenty-bagger, moving from the FTSE 250 when I bought to the takeover where I reluctantly sold.

ARM was the company whose designs offered the low power consumption that was becoming ever more important, and got its big boost with the rise of the smartphone. But more importantly, it was the centre of an ecosystem, allied to a lot of licencees, from Apple to Samsung to Qualcomm to NVidia to Huawei to ... all the big names. Like Microsoft from the late 1980s, allied to the likes of Compaq, Dell, and hundreds of lesser names - one of many lesser players was Alan (now Lord) Sugar's Amstrad.

On the strength of that ecosystem, Microsoft had conquered the world with a substantially inferior product. ARM had the ecosystem AND a superior product. The most obvious winner in the history of my investing!

That was then. This is now. ARM is an incumbent. The interesting - albeit speculative - stories lie elsewhere, as companies seek an open alternative. The long-term prospects have very probably been holed below the waterline by Trump's America First war on Chinese tech and European development, that turbocharged efforts to develop a serious open source alternative free of US jurisdiction. It may do nicely for a while, but to buy today would be to try and time the market.

RIP Gengulphus. We miss you.

No one doubts the success of ARM. My point was to question the benefit for the company in listing in the US rather than London. Obviously there is probably more scope for the directors and/or executives in the US than London but that is another issue.

Dod

I think it's a shame that ARM doesn't have even a secondary listing in London. I fully understand why ARM chooses to list in the USA. It's a sad situation where single companies listed in the USA are worth more on their own than the entire UK stock market. Relative decline will continue here would be my guess. London looks destined to become nothing more than a backwater on the global investment landscape. Apologies, that's off topic.

simoan wrote:Whenever someone mentions ARM I always think of our dear late friend Gengulphus who was one of the original founders. I also think of that abysmal woman Theresa May and her abysmal government who let Softbank steal the company from the UK market just to show the UK was “open for business” post Brexit. Where open for business. = draws down and bending over.

Gengulphus...that was really why I posted.

BullDog wrote:I think it's a shame that ARM doesn't have even a secondary listing in London. I fully understand why ARM chooses to list in the USA. It's a sad situation where single companies listed in the USA are worth more on their own than the entire UK stock market. Relative decline will continue here would be my guess. London looks destined to become nothing more than a backwater on the global investment landscape. Apologies, that's off topic.

I can see two very good reasons for LSE to be in decline, and doubtless there are more.

As for the dominance of US companies, there are historic roots, but when we had Trump's America First we also saw quite a few Fifth Columnists in the UK parliament and media - Tugendhat sticks in my recollection as being prominent among them - working to ensure the UK doesn't challenge another generation of US dominance.

e

UncleEbenezer wrote:

BullDog wrote:I think it's a shame that ARM doesn't have even a secondary listing in London. I fully understand why ARM chooses to list in the USA. It's a sad situation where single companies listed in the USA are worth more on their own than the entire UK stock market. Relative decline will continue here would be my guess. London looks destined to become nothing more than a backwater on the global investment landscape. Apologies, that's off topic.

I can see two very good reasons for LSE to be in decline, and doubtless there are more.

As for the dominance of US companies, there are historic roots, but when we had Trump's America First we also saw quite a few Fifth Columnists in the UK parliament and media - Tugendhat sticks in my recollection as being prominent among them - working to ensure the UK doesn't challenge another generation of US dominance.

Can you give us an example of any current UK politician who has the power to effectively challenge American wealth, power and domination?

I missed out on ARM here, which has doubled in less than one week. But with holdings in Nvidia, AND and Broadcom I think I have sufficient exposure to what has become the most important stock sector - chips. Nvidia overtook Amazon in market cap yesterday at about $1.8 trillion.

Lootman wrote:e

UncleEbenezer wrote:I can see two very good reasons for LSE to be in decline, and doubtless there are more.

As for the dominance of US companies, there are historic roots, but when we had Trump's America First we also saw quite a few Fifth Columnists in the UK parliament and media - Tugendhat sticks in my recollection as being prominent among them - working to ensure the UK doesn't challenge another generation of US dominance.

Can you give us an example of any current UK politician who has the power to effectively challenge American wealth, power and domination?

They don't. That's the business of industry. Companies like, erm, ARM.

What the politicians could and did do at Trump's bidding (Boris tried but eventually failed to resist) was to hold back UK technology, thereby radically reducing the chance of the next generation of Google or Amazon coming from Blighty.

Lootman wrote:Can you give us an example of any current UK politician who has the power to effectively challenge American wealth, power and domination?

The answer is both obvious and SHOULD be obvious on ANY subject.
What you describe is the sort of "strong man" rule, beloved by many in the eastern block.

What would be needed is a GROUP of politicians who encourage business and investment in the UK, rather than discourage it.
If you like, a new "white heat of technology" era.

Ps, if you REALLY want an example of a politician who had grand ideas of making the UK a new hub for a given technology, then look no further than the current PM's former idea of making the UK a crypto hub. Contrast that with events to constrain the crypto industry in the UK since he became PM. Regardless of his own opinions, he needed a consensus and support to achieve any of his ideas, regardless of your opinion of those ideas.

Urbandreamer wrote:

Lootman wrote:Can you give us an example of any current UK politician who has the power to effectively challenge American wealth, power and domination?

The answer is both obvious and SHOULD be obvious on ANY subject.
What you describe is the sort of "strong man" rule, beloved by many in the eastern block.

What would be needed is a GROUP of politicians who encourage business and investment in the UK, rather than discourage it.
If you like, a new "white heat of technology" era.

Ps, if you REALLY want an example of a politician who had grand ideas of making the UK a new hub for a given technology, then look no further than the current PM's former idea of making the UK a crypto hub. Contrast that with events to constrain the crypto industry in the UK since he became PM. Regardless of his own opinions, he needed a consensus and support to achieve any of his ideas, regardless of your opinion of those ideas.

There’s that protest group called Led by Donkeys isn’t there? I think that’s an incredible put down to donkeys and they should get their legal team to sue for defamation. How many leading edge technology companies were started by no necks coming out of Eton? Now. let me think…

So having touched $160 yesterday ARM closed below $120.

Softbank still owns 90% of the stock so the 10% that is traded basically moves like an option.

Dod101 wrote:No one doubts the success of ARM. My point was to question the benefit for the company in listing in the US rather than London. Obviously there is probably more scope for the directors and/or executives in the US than London but that is another issue.

Dod

It gives it a very plausible claim to be an American organisation with the political (both geo & regulatory) advantages that gives it
- particularly given the risk of an incoming isolationist leader

Lootman wrote:So having touched $160 yesterday ARM closed below $120.

Softbank still owns 90% of the stock so the 10% that is traded basically moves like an option.

This structure doesn't seem like a warm welcome for new ARM shareholders.
Sounds like Softbank's shareholders think they can use their 90% to impoverish the 10%.
I would have liked to buy a reasonably priced share in ARM and where more shares were sold but this looks too weird for me.

servodude wrote:

Dod101 wrote:No one doubts the success of ARM. My point was to question the benefit for the company in listing in the US rather than London. Obviously there is probably more scope for the directors and/or executives in the US than London but that is another issue.

Dod

It gives it a very plausible claim to be an American organisation with the political (both geo & regulatory) advantages that gives it
- particularly given the risk of an incoming isolationist leader

Thanks. The regulatory regime in itself I suppose is a good enough reason. For instance does a 10% float give a fair indication of value? Would a London float allow that?

Dod