ALEX BRUMMER: Arm investors should be prepared for a roller coaster ride

The hype surrounding Cambridge-based Arm Holdings’ New York initial public offering (IPO) has gained momentum in recent days.

Softbank founder Masayoshi Son may have failed to prove he is the safe owner of Britain’s most valued technology company.

When it comes to operating on the stock markets, he is an expert.

The £40bn company’s aggressive marketing has raised hopes that shares will soon command a premium.

Arm is being sold not only as an innovative smart chip maker, but also potentially as the next Nvidia, the star tech stock of 2023, as the importance of artificial intelligence (AI) to progress and productivity in the global economy becomes increasingly clear.

Seller: SoftBank founder Masayoshi Son (pictured) may not have proven to be a safe owner for Arm, but when it comes to playing the stock market, he is a masterstroke

The stocks’ rise was ensured by a glamorous line-up of key investors.

These include Nvidia – which was blocked by competition authorities from taking over Arm – Apple, Google, Samsung, Intel and Taiwanese semiconductor champion TSMC.

The presence of these tech giants on the share registry should ensure that Arm’s technology neutrality is maintained, and also means there are blocking stakes in case any of these companies like their chances of gaining full control.

There has been a lot of excitement in the UK recently about the slow decline in offers from the city to New York.

Last week, Irish cardboard company Smurfit Kappa said it would move its primary listing to Wall Street if it completes its planned merger with Atlanta rival WestRock.

Still, the performance of American IPOs has been dismal in recent years. The ten largest offers of the last four years have fallen 47 percent compared to the closing price on the first day of trading.

In fact, only two stocks managed to command high premiums – Montana-based cloud computing platform Snowflake and Airbnb.

Under Softbank’s tutelage, Arm never really made a big breakthrough into the top tier of the tech industry.

Investors will almost certainly be wary of the joint venture with China that Softbank boss Son has signed. The boardroom was a battleground between Beijing and independent directors.

Furthermore, the current heightened security concerns regarding the cyber threat posed by China will undoubtedly cast a dark shadow over the operation.

Investors may also feel like they need to be wary of Softbank gifts. An FT analysis found the average loss on Softbank-backed IPOs is 46 percent.

It would be great if British long investors, who have supported Arm from the start, would once again support British technology, helping to make the IPO a global success.

British private investors could be tempted. But things are unlikely to go smoothly in a share registry dominated by the giants.

Empty vessels

The last thing the UK needs is more empty high street shops. Efforts to save Wilko appear doomed to failure with 12,500 jobs lost.

The only saving grace is that, despite the recent rise in unemployment, there are still nearly a million job vacancies.

The sale of Restaurant Group’s Frankie & Benny’s and Chiquito restaurants to private equity-backed Big Table also points to more empty locations.

Whether the run-down high street needs a royal commission to remedy the situation is a matter of debate.

Problems at Wilko and elsewhere must ultimately be attributed to inattentive management and greedy owners.

One ingredient that could make a real difference to the high street is civic pride. There is nothing more disheartening than places littered with trash and covered in graffiti.

Retail is an organic business. B&M will benefit from Wilko’s demise.

Supermarkets showed that there is a demand for local and convenience stores in urban centers.

The rise of bakery chains like Bain Capital-backed Gail’s shows that high street cafes can thrive with imagination. There is no substitute for entrepreneurship.

Turn on

Sky is confident that the subscription model will continue as it bids for the next round of Premier League football rights.

There may be some comfort from reports that the standoff between Disney and US cable service Charter Spectrum, which blocked viewers from accessing ESPN sports channels, has been resolved.

As technology and viewing habits change and streaming increases, the future of bundled subscriptions will change dramatically.