Ben Marlow doesn’t understand flotations

Bit of a difficulty there when you’re a market commentator for a major newspaper:

A far better alternative exists anyway, at least from Arm’s perspective and the wider national interest: a bumper share listing that returns it to the stock market after an underwhelming five years in Softbank’s hands.

The City would back it in a heartbeat. Fund managers are desperate to own technology stocks, despite many of the same investors facilitating Arm’s sale in 2016. By selling shares to overseas investors, it would help to counter suggestions that Brexit Britain has suddenly adopted a more protectionist stance. A retail offering would ensure there is wider public support too.

The billions raised could be ploughed back into its Cambridge base, matching a pledge from Nvidia, and a joint venture agreed with the Americans to make up for the disappointment of being jilted so late in the day.

What billions?

Softbank is selling it. The money from the sale – whether selling the company to Nvidia, or floating it on a stock market – goes to Softbank.

Plus, of course, Softbank wants its money. Meaning that they’d have to try and float the whole thing, not retain a shareholding at all. Which would be rather tough to do.

In short, the man’s dribbling.

And it would give the Government the home-grown tech champion to rival Facebook or Apple that it craves. Arm is already an established global star but its sale to Softbank was an act of national stupidity by a government desperate to prove its international investment credentials in the wake of the referendum.

This is a golden opportunity to reverse that mistake and ensure Arm’s future is preserved, rather than the company becoming an expendable offshoot of a foreign rival.

It wasn’t the government’s to sell in the first place and isn’t the government’s to dispose of now either. It’s also a home grown champion whoever owns it. It’s all getting rather Mussolini this stuff, isn’t it?

8 thoughts on “Ben Marlow doesn’t understand flotations”

  1. By selling shares to overseas investors, it would help to counter suggestions that Brexit Britain has suddenly adopted a more protectionist stance … its sale to Softbank was an act of national stupidity by a government desperate to prove its international investment credentials in the wake of the referendum

    “They should sell some shares to foreigners because selling all the shares to foreigners was stupid.”

    Is that not Elyesque levels of incoherence?

  2. A similar misconception often occurs when football clubs are taken over, some businessman with more money than sense buys an ailing lower league club for (lets say) £10m, and the fans all seem to think ‘the club’ now has £10m to spend on more muddied oafs. When I try to point out that ‘the club’ has bugger all new funds and the former owners are now laughing all the way to the bank I get blank looks……..at least such people aren’t employed as financial journalists though.

  3. Actually, Jim, it would seem that several such people are employed as financial journalists. Financial journalists know nothing about finance, science journalists know nothing about science, and technology journalists know nothing about technology. I think I’m beginning to detect a pattern, here.

  4. “It’s all getting rather Mussolini this stuff, isn’t it? “

    Don’t get me started on that politician’s & journalist’s favourite: “Britain’s 5G network”.
    Britain doesn’t have a 5G network, nor is it intending to build one. Nor indeed does it have a 2G, 3G or 4G mobile network.

    Several private sector companies have spent £billions of their own money in building such networks (paying through the nose for Government permission to do so, licences & spectrum, and so on).
    So it gets my goat when some unemployable sack of shite (paid by MY taxes!) says “don’t buy hardware built in China running softwatre written in China, with a Huawei label on the front. But it’s perfectly OK for you to pay 3x as much for hardware built in China running softwatre written in China, so long as the label on the front says Elicsson or Rokia”.

    What goes around comes around, and it seems the First World is due for another widespread outbreak of Fascism. Should keep the PRC happy, as they’ve set the example. Really not sure where Russia fits in this: not a liberal democracy, for sure. Gangsterism, or just yet another instance of the puffed up Italian’s vision?

    Investment advice: buy futures in barbed wire and Zyklon B (aka booster shots?).

  5. Bloke in North Dorset

    “ Actually, Jim, it would seem that several such people are employed as financial journalists. Financial journalists know nothing about finance, science journalists know nothing about science, and technology journalists know nothing about technology. I think I’m beginning to detect a pattern, here.”

    My working hypothesis is that access to knowledge means more people have woken up to this effect and are abandoning the MSM. There used to be a time when specialist journalists came from the discipline, over the years they’ve been substituted by generalists with journalism degrees.

    https://www.epsilontheory.com/gell-mann-amnesia/

    FWIW I think something similar has happened in the management of big corporations. You don’t experience in a business, an MBA means you can manage anything. (A touch of melanin and/or X chromosomes are becoming handy a well)

  6. ‘FWIW I think something similar has happened in the management of big corporations.’

    You’re reminding me of Coon Cheese BiND, which I always used to eat.

    Since the horrid word Coon was deemed to be an offensive name for the abos, they changed the name and, even worse, changed the cheese. I found the new cheese yuckish, so I switched to another brand.

    I’ve noticed that the name Coon seems to have resurfaced in the local shop, but I wasn’t game to give it another try.

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