Wall Street Breakfast Podcast: Arm Holdings Valuation Exceeds $54B

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Arm Holdings (ARM) prices IPO at $51 a share, top of range. (00:28) Netflix (NFLX) drops as ads tier not seen driving revenue in short-term, CFO says. (01:54) French regulator orders Apple (AAPL) to withdraw iPhone 12 model due to high radiation levels. (02:39)

This is an abridged transcript of the podcast.

Arm Holdings (ARM) priced its initial public offering at $51 per share.

ARM, is majority-owned by Softbank Group (OTCPK:SFTBY).

According to a statement, the 95.5 million share offering gives it a valuation at more than $54 billion.

ARM is expected to debut today on the Nasdaq and trade under the symbol ARM.

According to Bloomberg, the IPO was oversubscribed by 10 times. And CNBC reported, Taiwan Semiconductor Manufacturing Company Limited (TSM), Intel (INTC), Advanced Micro Devices (AMD), Nvidia (NVDA), Alphabet’s Google (GOOG), Apple (AAPL) and Samsung Electronics Co., Ltd. (OTCPK:SSNLF) planned to buy $735M of the float.

ARM, which has nearly 6,000 full-time employees, saw revenue for the fiscal year ended in March relatively flat at $2.679B compared to $2.703B a year earlier.

Net income from continuing operations for the year totaled $524M compared to $676M in the previous period.

For the calendar year ended Dec. 31, 2022, the company estimated that its total addressable market was approximately $202.5B, according to a filing. ARM forecast TAM will grow at a 6.8% compound annual growth rate to about $246.6B by the end of 2025.

Netflix (NASDAQ:NFLX) fell 5% on Wednesday as leadership doesn’t see meaningful impact in the near-term from its advertising tier.

Chief Financial Officer Spence Neumann said the streaming service saw a “muted” cancellation reaction after it cracked down on password sharing. An estimated 100 million people were not paying for a subscription and taking advantage of family and friend accounts.

“Revenue is building,” Neumann said, and will continue to do so through 2024. Those “spinoff” subscribers, however, are trending more towards ad-free viewing, which isn’t ideal for building up an ad business.

“We have to scale the reach our of ads tier,” the executive said at a Bank of America conference.

France's radiation watchdog Agence Nationale des Frequences (ANFR) has asked Apple (NASDAQ:AAPL) to stop selling its iPhone 12 model in the country due to high radiation levels.

The ANFR said it recently measured the specific absorption rates (SAR) - or the amount of energy transported by electromagnetic waves and absorbed by the human body - of 141 phones including AAPL's iPhone 12, and found that the model exceeded the legal SAR limit.

ANFR said in a statement, "Therefore, Apple (AAPL) must immediately take all measures to prevent the affected phones present in the supply chain from being made available on the market" .

The statement went on to say, "For phones already sold, Apple must take corrective action as soon as possible to bring the affected phones into compliance. Otherwise, it will be up to Apple to recall them."

Apple (AAPL) did not immediately respond to multiple requests for comment from Seeking Alpha.

Other headlines to look out for on Seeking Alpha:

CrownRock exploring potentially biggest U.S. oil and gas sale in three years - Reuters

FTX gets green light to sell $3.4B in bitcoin, ethereum, solana

Google lays off hundreds from recruiting team: Report

Hackers in the casino: MGM Resorts sees ongoing disruption while Caesars pays a ransom

U.S. stocks on Wednesday ended mixed after the latest consumer price index (CPI) report showed an increase in core inflation for the first time in six months.

The Nasdaq (COMP.IND) closed 0.29% higher. The S&P 500 (SP500) added 0.12%, while the Dow (DJI) slipped 0.20%.

Of the 11 S&P sectors, six closed in positive territory, led by Utilities and Consumer Discretionary. Real Estate, Energy and Industrials were the top three losers.

Treasury yields on Wednesday were largely muted after the CPI data. The 10-year yield (US10Y) was down 1 basis point to 4.25%, while the 2-year yield (US2Y) was down 3 basis points to 4.98%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.3%, the S&P 500 is up 0.3% and the Nasdaq is up 0.4%. Crude oil is up 0.5% at nearly $89 a barrel. Bitcoin is up 0.5% at more than $26,000

In the world markets, the FTSE 100 is up 0.8% and the DAX is up 0.03%.

The biggest stock movers for the day premarket: Ivanhoe Electric (NYSE:IE) is down more than 12% following a public offering of 11.85M shares at $13.50 per share, with gross proceeds expected to be around $160M.

On today’s economic calendar at 8:30am PPI. Also at 8:30am retail sales.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.