Why The Full Court Press & Why Now?
Maybe it is just the conspiratist in me but it seems there is a recent full court press to prop up the falling technology stocks (Magnificent Seven and others) and the stock market as a whole in the last week or so. I believe it is more than just delaying the inevitable stock market crash for as long as possible. Today is the ARM IPO and that seems to be the immediate goal. Wall Street couldn’t have a full blown, tech stock decline before this IPO takes place. It is important on many levels to try and open up the IPO market again(there are numerous companies waiting to go public) as well as keep the narrative going that we aren’t in a recession. The most blatant example was the Monday upgrade by Morgan Stanley of Tesla. The bullshit hype about their Dojo computer being worth $500 billion in additional market cap value is laughable. It was perfectly timed for this week with the ARM IPO needing to be priced(yesterday) and start trading.(today) Throw in the “closed door” Senate hearing on regulating AI where all the main players CEO’s were called to appear and I smell a rat. As much as the govt. wants to and will regulate AI to some extent, I think part of this closed door confab was to pressure the CEO’s to make sure their companies, many of which already expressed some interest in investing in the ARM IPO, do so and in a strong way to make sure it isn’t a flop. If the offering goes south shortly after trading begins later today, the stock market would tank and the IPO window would probably shut down for months at least. The CEO’s of all these trillion dollar market cap companies were probably urged to strongly support this deal by investing and holding on to whatever stock they buy in ARM for the long term. While this confluence of levers being pulled will probably insure no disaster with the IPO and keep the stock market afloat for a little while longer fundamentals and fund flows will eventually will out.
Appreciate these Morning musings CM. Always interesting
What is ARM ?
“British chip designer Arm Holdings (ARM) has priced its initial public offering of 95.5M shares at $51 apiece, at the upper end of the expected range of $47-$51. This gives Arm, majority-owned by Softbank (OTCPK:SFTBY), a valuation of more than $54B. The IPO was oversubscribed by 10 times, with major companies such as Intel (INTC), Nvidia (NVDA) and Apple (AAPL) eyeing $735M of the float. SA analyst David Krejca believes the IPO price is very generous, saying long-run investors are better off waiting for lower prices, while Cavenagh Research said Arm’s leadership in the CPU industry and its AI involvement make it an attractive investment opportunity. Also see what WSB subscribers think about investing in IPOs before Arm begins trading today.” From Seeking Alpha
Ha…British Chips ?
The only Chips I’d by from a Brit would be Fish and Chips . 🙂