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Comment by Nux | Hacker News Reader

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.

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.

http://www.google.co.uk/finance?cid=662445

(clicky for convenience)

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.

These punks nailed that one: https://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me...

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.

Not just mobile. Works on my desktop Firefox too.

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.

> the largest corporate acquisition in UK corporate history

I think this is BG Group.

Edit: The parent edited to "one of the largest". Thanks!

> 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!

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

How?

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.

Wouldn't every company that could afford a part-time CFO be hedging currency exposure?

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.

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.

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...

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

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-softba...

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.

>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.

My own impression is that for a modern developed economy looking healthy is far more key than being healthy.

> 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/11561...

> 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...

http://www.theresa2016.co.uk/we_can_make_britain_a_country_t...

Great catch. Pity this hasn't been more widely noted.

The source above is The Guardian, a national newspaper, so it's not exactly obscure.

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.

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

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