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TechCheck

Bullish Reception for Arm Holdings 10/9/23

TechCheck

CNBC

Disruptors, Cnbc, Investing, Tech, Management, Business, Technology, Faang

4.566 Ratings

🗓️ 9 October 2023

⏱️ 7 minutes

🧾️ Download transcript

Summary

The chip designer Arm gained a number of bulls today as its post-debut quiet period ends, with more than 10 firms involved in underwriting the IPO initiating coverage of the company at a “buy” rating or equivalent, despite the stock being down more than 20% from the intra-day high after it IPO-ed. That’s good news for Softbank founder Masayoshi Son, as Arm has become his firm’s new crown jewel after Alibaba, going from a 12% stake in March last year to 22% as of June this year.

Transcript

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0:00.0

Arm Holdings getting quite a few bull calls today, a slew of analysts

0:05.0

initiating coverage and are optimistic about the chip designer's growth.

0:08.5

That's what Deirdre Bosa is watching in today's Tech Check.

0:11.0

Hey, Dee.

0:12.0

It's been 25 days already since Arm went public. That's

0:14.7

a quiet period before the banks that underwrote the IPO published research. So in

0:19.2

arms case, there were many, many of them. So a flurry of notes this morning. I counted 10 altogether.

0:24.6

Every single one of them, a buy. And that leaves just one cell rating from Bernstein,

0:29.4

which was not involved in the IPO, and it gives Arm a medium price, a mean price, excuse me, target of $63.43.

0:36.8

It's nearly 10 bucks above where it trades today.

0:39.0

Meanwhile, though, the market has at large cooled on Arm.

0:42.3

The stock surged 25% on its debut that was IPO day but it has

0:46.3

since paired back most of those gains now since I've covered stopping for a long time

0:50.0

I'm always interested in what this all means for Masioshi Sun and what it means for how he's going to run his Japanese conglomerate.

0:57.2

Now this chart shows the equity value of Soft Banks Holdings.

1:00.8

Historically, Alibaba has been the crown jewel underpinning Masa's push into venture investing,

1:07.0

division funds, and letting him shore up finances amid uncertain times.

1:11.2

Now, the result of that over the last few years

1:13.7

Alibaba went from being 23% of Softbank to a miniscule one-tenth of a

1:19.8

percent proportion. It is the orange. You can barely see it on the second line there. Now the biggest

1:25.0

holding, that is the blue portion of the chart. Those are the Vision Funds 1 and 2, which are

1:29.5

far less liquid because it is made up of stakes, mostly in private companies. Now the new

...

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