CA - ARM: Everything You Need To Know About The Lock-Up Expiry (Rating Upgrade)

2024-03-12 11:10:09 ET

Summary

• Arm Holdings plc's recent pullback in stock price presents an opportunity to invest in the company's AI prospects, which remain intact.
• The expiration of Arm Holdings' lock-up agreement raises concerns about a potential selloff, but there is likely limited incentive for SoftBank to exit its position.
• The following analysis will provide an overview of Arm Holdings' IPO lock-up agreement, and discuss potential alternatives to a selloff that would unlock greater upsides for both SoftBank and Arm.

Arm Holdings plc ( ARM ) has been on a tear this year, with its recent release of impressive F3Q24 earnings corroborating participation in emerging AI opportunities. But its eye-watering year-to-date upsurge of as much as 116% has been stopped short by a steepening pullback this week. Much of the stock’s latest declines appear congruent with market’s AI darling Nvidia’s ( NVDA ) steep selloff on Friday. There are also additional downside risk implications pertaining to the expiry of its IPO lock-up agreement today (March 12). This has potentially weighed on the stock’s recent performance as well....

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