7 ms·

Now that they got their country back, they can sell it off. :-) Probably the lower value of the £ has probably contributed to this, or hastened it.

by Nux 10y ago

grabcocque 10y ago
Turns out one of the largest corporate acquisitions in UK corporate history probably took more than a fortnight to put together. But a weaker pound certainly makes the UK are more attractive target for investment.
- sanxiyn 10y ago
  > the largest corporate acquisition in UK corporate history I think this is BG Group. Edit: The parent edited to "one of the largest". Thanks!
- rmc 10y ago
  > But a weaker pound certainly makes the UK are more attractive target for investment. If only the UK wasn't going to leave the largest free trade group!
dawson 10y ago
It didn't, Brexit made it 7% more expensive for SoftBank https://twitter.com/jamestitcomb/status/754966707769315333 https://twitter.com/jamestitcomb/status/754966707769315333
- roel_v 10y ago
  How?
  - deleted 10y ago
    [deleted]
  - vidarh 10y ago
    ARMs income is mostly in dollars, and their expenses mostly in pounds. Accordingly if you look at the FTSE100 index, it's moved up about as much as the pound has dropped because a lot of the companies on it will profit from a weaker pound, while if you look at the FTSE250, which includes a large number of companies with income predominantly in pounds, it's down.
    - rfrey 10y ago
      Wouldn't every company that could afford a part-time CFO be hedging currency exposure?
      - vidarh 10y ago
        A lot of the FTSE-250 companies seeing dropping share prices are companies that are based in the UK, and making most of their income in the UK. While some of them probably could (and some I'm sure have) hedge against increased prices from foreign suppliers, for most of the the big problem is expected problems with domestic demand. Some certainly faces currency risks too, but then the question is how much are you willing to spend to hedge? It's highly unlikely most companies have sufficient earnings that they could have afforded to hedge against movements of this magnitude for anything but a short period. Certainly they can - and I'm sure some have - reduce the impact and give themselves time to adapt, but the cost of hedging against the effects of movements of this size and effects potentially lasting years would be prohibitive for almost anyone.
    - Gravityloss 10y ago
      Say you work at Arm, and are thinking of buying an apartment. The London market has a lot of people from Asia doing investments. If the pound weakens against the yuan, tough luck. Or perhaps you were thinking of buying an imported car or having a vacation in Europe... those job postings at Intel, AMD or IBM start to look a lot better than before.
      - vidarh 10y ago
        ARM's head office isn't in London, but Cambridge. Even so, foreign investors drive up the purchase prices, true, but not that much as when they drive up the prices, they drive down the profit potential as well as drive down (or reduce the growth of) rental prices which makes it costlier to leverage. I do agree with you the entire Brexit situation makes it tempting to look elsewhere, though. Personally I do consulting, and I've started looking for US remote devops consulting gigs in preference to UK ones because it's suddenly a lot more attractive to get paid in dollars...
  - smcl 10y ago
    Perhaps the fall in the GBP was offset by rises in their stock price coming from speculation that companies with large amounts of GBP-denominated exports would sell more? Total guess
- carterehsmith 10y ago
  Man, this is so confusing. I just read an article that claims the opposite, ie that Brexit made it 30% _cheaper_ for Softbank, due to Yen vs Pound exchange rate. "Brexit Made ARM Holdings A Bargain For Softbank" http://www.forbes.com/sites/parmyolson/2016/07/18/arm-softbank-bargain-britain/#5cdd098a3fdb http://www.forbes.com/sites/parmyolson/2016/07/18/arm-softba...
adamt 10y ago
If you look at the value of ARM's $-denominated ADRs http://www.google.co.uk/finance?cid=662445 This is basically a measure ARM's value in $. You will see any value in the fall the pound was more than offset by a rise in ARM's share price at the time. As ARM's revenue is largely $ denominated and it has significant proportion of its costs in UK people (£) then the fall in the pound led to a bigger rise in its share price as the markets expected bigger profits.
- B1FF_PSUVM 10y ago
  http://www.google.co.uk/finance?cid=662445 http://www.google.co.uk/finance?cid=662445 (clicky for convenience)
  - Fifer82 10y ago
    I felt the need to show gratitude for the clicky. Quite odd really, had it not been clicky, I would not have opened the link. Yet, it took 1000 times more effort to write this but it felt worth it.
    - B1FF_PSUVM 10y ago
      These punks nailed that one: https://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me_Death https://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me...
    - chronial 10y ago
      If you are not on mobile, you can just select the url and drag it between two tabs on your tab bar to open it.
      - pritambaral 10y ago
        Not just mobile. Works on my desktop Firefox too.
JohnStrange 10y ago
So what, we're living in one and the same world anyway.
deleted 10y ago
[deleted]
mtgx 10y ago
Which is so strange that this is exactly the argument Theresa May made yesterday. Something along the lines of "this proves that UK can do well even post-Brexit!" First of all - what?! And second, this has nothing to do with the brexit anyway. Softbank even said they were going to do the acquisition with or without Brexit.
- pbhjpbhj 10y ago
  >Softbank even said they were going to do the acquisition with or without Brexit. // If there's one thing May and her ilk proved beyond doubt in the referendum it's that they don't care about the truth, only what they can spin to make things look better to an uninformed electorate. That's certainly not a new thing but it seems to have reached a new level that leaves all semblance of honour behind it.
  - Alphasite_ 10y ago
    My own impression is that for a modern developed economy looking healthy is far more key than being healthy.
    - SideburnsOfDoom 10y ago
      > looking healthy is far more key than being healthy. The Conservative part of the United Kingdom basically has the selling point of "fiscal probity" - i.e being Conservative, they are good for business and don't take risks with the health of the economy. For instance they literally campaigned on it in 2015 (1) They have to continue to try to project that image, even when it's laughably at odds with actual events. Otherwise, what are they even for? 1) http://www.telegraph.co.uk/news/politics/david-cameron/11561628/David-Cameron-Weve-saved-the-economy-from-ruin-dont-let-Ed-Miliband-spoil-it.html http://www.telegraph.co.uk/news/politics/david-cameron/11561...
- SideburnsOfDoom 10y ago
  > Which is so strange that this is exactly the argument Theresa May made yesterday. And the exact opposite of the argument that she made a week ago: "A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain." https://www.theguardian.com/business/nils-pratley-on-finance/2016/jul/18/philip-hammond-softbank-takeover-arm-holdings-overseas-investors https://www.theguardian.com/business/nils-pratley-on-finance... http://www.theresa2016.co.uk/we_can_make_britain_a_country_that_works_for_everyone http://www.theresa2016.co.uk/we_can_make_britain_a_country_t...
mikeash 10y ago
Wouldn't a weaker pound improve ARM's position? I assume their licensing deals are denominated in foreign currency, so a drop in the pound means more profits for them.

Now that they got their country back, they can sell it off. :-) Probably the lower value of the £ has probably contributed to this, or hastened it.

by Nux 10y ago

Now that they got their country back, they can sell it off. :-) Probably the lower value of the £ has probably contributed to this, or hastened it.

grabcocque 10y ago

Turns out one of the largest corporate acquisitions in UK corporate history probably took more than a fortnight to put together. But a weaker pound certainly makes the UK are more attractive target for investment.

sanxiyn 10y ago
> the largest corporate acquisition in UK corporate history I think this is BG Group. Edit: The parent edited to "one of the largest". Thanks!
rmc 10y ago
> But a weaker pound certainly makes the UK are more attractive target for investment. If only the UK wasn't going to leave the largest free trade group!

dawson 10y ago

It didn't, Brexit made it 7% more expensive for SoftBank https://twitter.com/jamestitcomb/status/754966707769315333 https://twitter.com/jamestitcomb/status/754966707769315333

roel_v 10y ago
How?
- deleted 10y ago
  [deleted]
- vidarh 10y ago
  ARMs income is mostly in dollars, and their expenses mostly in pounds. Accordingly if you look at the FTSE100 index, it's moved up about as much as the pound has dropped because a lot of the companies on it will profit from a weaker pound, while if you look at the FTSE250, which includes a large number of companies with income predominantly in pounds, it's down.
  - rfrey 10y ago
    Wouldn't every company that could afford a part-time CFO be hedging currency exposure?
    - vidarh 10y ago
      A lot of the FTSE-250 companies seeing dropping share prices are companies that are based in the UK, and making most of their income in the UK. While some of them probably could (and some I'm sure have) hedge against increased prices from foreign suppliers, for most of the the big problem is expected problems with domestic demand. Some certainly faces currency risks too, but then the question is how much are you willing to spend to hedge? It's highly unlikely most companies have sufficient earnings that they could have afforded to hedge against movements of this magnitude for anything but a short period. Certainly they can - and I'm sure some have - reduce the impact and give themselves time to adapt, but the cost of hedging against the effects of movements of this size and effects potentially lasting years would be prohibitive for almost anyone.
  - Gravityloss 10y ago
    Say you work at Arm, and are thinking of buying an apartment. The London market has a lot of people from Asia doing investments. If the pound weakens against the yuan, tough luck. Or perhaps you were thinking of buying an imported car or having a vacation in Europe... those job postings at Intel, AMD or IBM start to look a lot better than before.
    - vidarh 10y ago
      ARM's head office isn't in London, but Cambridge. Even so, foreign investors drive up the purchase prices, true, but not that much as when they drive up the prices, they drive down the profit potential as well as drive down (or reduce the growth of) rental prices which makes it costlier to leverage. I do agree with you the entire Brexit situation makes it tempting to look elsewhere, though. Personally I do consulting, and I've started looking for US remote devops consulting gigs in preference to UK ones because it's suddenly a lot more attractive to get paid in dollars...
- smcl 10y ago
  Perhaps the fall in the GBP was offset by rises in their stock price coming from speculation that companies with large amounts of GBP-denominated exports would sell more? Total guess
carterehsmith 10y ago
Man, this is so confusing. I just read an article that claims the opposite, ie that Brexit made it 30% _cheaper_ for Softbank, due to Yen vs Pound exchange rate. "Brexit Made ARM Holdings A Bargain For Softbank" http://www.forbes.com/sites/parmyolson/2016/07/18/arm-softbank-bargain-britain/#5cdd098a3fdb http://www.forbes.com/sites/parmyolson/2016/07/18/arm-softba...

adamt 10y ago

If you look at the value of ARM's $-denominated ADRs http://www.google.co.uk/finance?cid=662445 This is basically a measure ARM's value in $. You will see any value in the fall the pound was more than offset by a rise in ARM's share price at the time. As ARM's revenue is largely $ denominated and it has significant proportion of its costs in UK people (£) then the fall in the pound led to a bigger rise in its share price as the markets expected bigger profits.

B1FF_PSUVM 10y ago
http://www.google.co.uk/finance?cid=662445 http://www.google.co.uk/finance?cid=662445 (clicky for convenience)
- Fifer82 10y ago
  I felt the need to show gratitude for the clicky. Quite odd really, had it not been clicky, I would not have opened the link. Yet, it took 1000 times more effort to write this but it felt worth it.
  - B1FF_PSUVM 10y ago
    These punks nailed that one: https://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me_Death https://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me...
  - chronial 10y ago
    If you are not on mobile, you can just select the url and drag it between two tabs on your tab bar to open it.
    - pritambaral 10y ago
      Not just mobile. Works on my desktop Firefox too.

JohnStrange 10y ago

So what, we're living in one and the same world anyway.

deleted 10y ago

[deleted]

mtgx 10y ago

Which is so strange that this is exactly the argument Theresa May made yesterday. Something along the lines of "this proves that UK can do well even post-Brexit!" First of all - what?! And second, this has nothing to do with the brexit anyway. Softbank even said they were going to do the acquisition with or without Brexit.

pbhjpbhj 10y ago
>Softbank even said they were going to do the acquisition with or without Brexit. // If there's one thing May and her ilk proved beyond doubt in the referendum it's that they don't care about the truth, only what they can spin to make things look better to an uninformed electorate. That's certainly not a new thing but it seems to have reached a new level that leaves all semblance of honour behind it.
- Alphasite_ 10y ago
  My own impression is that for a modern developed economy looking healthy is far more key than being healthy.
  - SideburnsOfDoom 10y ago
    > looking healthy is far more key than being healthy. The Conservative part of the United Kingdom basically has the selling point of "fiscal probity" - i.e being Conservative, they are good for business and don't take risks with the health of the economy. For instance they literally campaigned on it in 2015 (1) They have to continue to try to project that image, even when it's laughably at odds with actual events. Otherwise, what are they even for? 1) http://www.telegraph.co.uk/news/politics/david-cameron/11561628/David-Cameron-Weve-saved-the-economy-from-ruin-dont-let-Ed-Miliband-spoil-it.html http://www.telegraph.co.uk/news/politics/david-cameron/11561...
SideburnsOfDoom 10y ago
> Which is so strange that this is exactly the argument Theresa May made yesterday. And the exact opposite of the argument that she made a week ago: "A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain." https://www.theguardian.com/business/nils-pratley-on-finance/2016/jul/18/philip-hammond-softbank-takeover-arm-holdings-overseas-investors https://www.theguardian.com/business/nils-pratley-on-finance... http://www.theresa2016.co.uk/we_can_make_britain_a_country_that_works_for_everyone http://www.theresa2016.co.uk/we_can_make_britain_a_country_t...

mikeash 10y ago

Wouldn't a weaker pound improve ARM's position? I assume their licensing deals are denominated in foreign currency, so a drop in the pound means more profits for them.