Arm Begins Trading, AMC Issues More Stock, UAW Strike Deadline Is Midnight

When trading opens in New York on Thursday, Arm Holdings PLC (NASDAQ: ARM) will find out what investors really think the company is worth. Arm set its IPO price at $51 per American depositary share (ADS) late Wednesday and raised $4.87 billion at a total valuation of around $54.5 billion. Each ADS represents one ordinary share.

The company, which will operate as a subsidiary of Softbank Group, sold 95.5 million shares in the initial public offering, with a reported demand for 10 times that many. The IPO has put about 9% to 10% of Arm in investors’ hands while Softbank retains the rest. The underwriters have a  30-day overallotment option to purchase another 7 million ADSs.

So-called cornerstone investors included Apple, Nvidia, Advanced Micro Devices and Alphabet. The 10 cornerstone investors bought a reported $735 million worth of Arm stock.

In its F-1 filing with the Securities and Exchange Commission, Softbank said it has pledged “substantially all” of its Arm shares for a loan of $8.5 billion the firm received in March 2022. The company plans to pay off that loan after the IPO and borrow a similar amount in a new loan facility.

AMC Entertainment Holdings Inc. (NYSE: AMC) finally got what it wanted from its efforts to get shareholders to approve issuing more stock so that the company could raise more cash.

In a statement issued Thursday morning, the company said it has completed an at-the-market offering of 40 million shares at an average price per share of about $8.14. On Monday, the stock posted an all-time low of $7.05, and shares closed Wednesday at $8.24. The share offering raised more than $325 million, according to AMC’s CEO, Adam Aron, who noted that the proceeds have “bolstered our ability to survive and then thrive.”

AMC is one of three theater chains that will be screening “Taylor Swift: The Eras Tour,” a film documenting Swift’s current blockbuster live tour, beginning on October 13. Adults will pay $20, while kids and seniors will pay $13 to see the film on an AMC screen. When AMC announced in late August that it would be showing the film, its stock price jumped to a recent high of around $13.15. That boost partially offset the effect of the reverse stock split that cut AMC’s share price from around $45 to about $11.

The United Autoworkers are planning a series of strikes against all Big Three (Ford, General Motors and Stellantis) automakers beginning Thursday night at 11:59 p.m. If, as seems likely this happens, it will be the first time the union has struck all three U.S. automakers at the same time.

UAW president Shawn Fain said Wednesday that the union was likely to have to take action and that “we are preparing to strike these companies in a way they have never seen before.”

The union’s strategy is to launch a series of work stoppages at individual plants but not to reveal the location of the plants in advance. Fain said, “We’re going to hit where we need to hit.”

What the union is seeking is a wage boost of around 40%, reinstatement of company-paid pensions, a four-day workweek, the return of a cost-of-living adjustment (COLA) and the end of the two-tier model the companies adopted in 2007. Ford has proposed a 20.0% pay hike, GM has offered 18.0 and Stellantis 17.5%. The Big Three’s reactions to the other union demands vary.

In a report last week, Reuters cited an Anderson Consulting Group cost to the economy of $5 billion if the union strikes all three automakers for 10 days. A 2019 strike at GM lasted 42 days and forced GM to take a $3.6 billion pretax loss for the year.

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