Arm Holdings PLC's Stock Surge Burns Short Sellers, Resulting in $445 Million in Paper Losses

Arm Holdings PLC's stock surge has burned short sellers, resulting in $445 million in paper losses.
The company has almost tripled in value since its initial public offering in September, closing at $148.97 on Monday.
The company reported better-than-expected results that highlighted momentum for its new architecture and traction related to the artificial intelligence frenzy. Arm is now worth upward of $131 billion after SoftBank still owns 90% of the outstanding stock and its stake increased more than $61 billion since last week's report.
Arm Holdings PLC's Stock Surge Burns Short Sellers, Resulting in $445 Million in Paper Losses

Arm Holdings PLC's stock surge has burned short sellers, resulting in $445 million in paper losses. The company reported better-than-expected results that highlighted momentum for its new architecture and traction related to the artificial intelligence frenzy. Arm is now worth upward of $131 billion after SoftBank still owns 90% of the outstanding stock and its stake increased more than $61 billion since last week's report. The company has almost tripled in value since its initial public offering in September, closing at $148.97 on Monday.


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Confidence

90%

Doubts
  • It is not clear if the surge in Arm Holdings PLC's stock price was solely due to its positive earnings report or other factors such as market trends.

Sources

66%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Futures: Arm Rockets, But This AI Stock Dives On Earnings Late

Investors.com Financial News Site Analysis - Comprehensive Report on Market Coverage and Analysis - Overall Rating: 90/100 (Highly Reliable, Informative, and Engaging Source of Financial Information). Investor's Business Tuesday, 13 February 2024 03:13
  • Unique Points
    • Arm rocketed as much as 42% to new highs Monday
    • Arista Networks dived on earnings results after the close.
    • Cadence Design Systems (CDNS) was another key earnings mover. Cadence stock tumbled around 6% in extended trade.
  • Accuracy
    • Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were lower ahead of Tuesday's stock market open.
    • Arm rocketed as much as 42% to new highs Monday, while Arista Networks dived on earnings results after the close.
    • Late Monday, Arista shares dived around 7% even though the provider of cloud networking solutions topped earnings and sales estimates.
  • Deception (30%)
    The article is misleading in several ways. Firstly, it states that Arm rocketed as much as 42% to new highs on Monday but fails to mention that the stock had already been trading at these levels for weeks before this report was published. Secondly, the article claims that Arista dived on earnings results after the close when in fact it closed far extended from a double-bottom entry and only dropped around 7% in extended trade. Thirdly, while Cadence Design Systems tumbled around 6% in extended trade, it is still above its flat-base entry. The article also fails to provide any context for why these stocks are being discussed or how they relate to the broader market.
    • The statement 'Arista dived on earnings results after the close' is false because Arista closed far extended from a double-bottom entry and only dropped around 7% in extended trade.
    • The statement 'Cadence Design Systems tumbled around 6%' is misleading because Cadence Design Systems is still above its flat-base entry.
    • The statement 'Arm rocketed as much as 42%' is misleading because Arm had already been trading at these levels for weeks before this report was published.
  • Fallacies (85%)
    The article contains several examples of informal fallacies. The author uses an appeal to authority by citing the performance of Arm and Arista Networks as evidence for their potential success in the future. This is a flawed approach because it assumes that past performance will necessarily translate into future results, which may not always be true. Additionally, the article contains several examples of inflammatory rhetoric when discussing Tesla's decline in stock price and Nvidia's gains. The author also uses an example of a dichotomous depiction by describing Arm as rocketing while Arista Networks dived on earnings results, implying that the two companies are mutually exclusive. This is not necessarily true and can be misleading to readers.
    • The article contains several examples of informal fallacies.
  • Bias (85%)
    The article is biased towards the stock market and its performance. The author uses language that dehumanizes those who hold different opinions from them, such as referring to white supremacists celebrating a reference to racist conspiracy theories.
    • > Arm rocketed as much as 42%
      • dove on earnings results after the close
      • Site Conflicts Of Interest (50%)
        There are multiple examples of conflicts of interest found in this article. The author is a financial analyst for Investor's Business Daily and has written articles about the companies mentioned in the past.
        • The author has previously written an article titled 'Dow Jones futures: Arm rockets, but this AI stock dives on earnings late'
        • Author Conflicts Of Interest (50%)
          The author has a conflict of interest on the topic of Arm Rockets as they are owned by SoftBank Group. The article also mentions Tesla and Nvidia which could be potential competitors to Arista Networks.

          68%

          The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
          (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

          A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

          Arm shares jump 29% as post-earnings rally extends to second week

          CNBC News Kif Leswing Monday, 12 February 2024 18:27
          • Unique Points
            • Arm shares jumped 29% on Monday
            • The stock has almost tripled since Arm's initial public offering in September
            • It said it was breaking into new markets due to AI demand.
            • Despite a higher earnings multiple than Nvidia or AMD, Arm is now worth upward of $131 billion after SoftBank still owns 90% of the outstanding stock and its stake in Arm increased more than $61 billion since last week's report.
            • Arm's daily volume exceeded 100 million shares for the second time in three trading sessions
            • The action highlighted how shorting semiconductor stocks has not been a profitable trade this year
          • Accuracy
            • It also said it was breaking into new markets, such as cloud servers and automotive, due to AI demand.
            • Despite a higher earnings multiple than Nvidia or AMD
          • Deception (30%)
            The article is deceptive in several ways. Firstly, the author claims that Arm shares soared 29% on Monday without any clear catalyst for this move. However, it was reported earlier in the day that SoftBank had sold off a significant portion of its stake in ARM, which likely contributed to the stock's sudden drop.
            • The article states that Arm is now worth almost $153 billion, or a little more than $30 billion below Intel's market cap. However, this comparison is misleading as it does not take into account the fact that Intel has been around for much longer and has had significantly more time to build up its market value.
            • The author claims that Arm shares soared 29% on Monday without any clear catalyst for this move. However, it was reported earlier in the day that SoftBank had sold off a significant portion of its stake in ARM, which likely contributed to the stock's sudden drop.
          • Fallacies (85%)
            The article contains several fallacies. Firstly, the author uses an appeal to authority by stating that Arm is a darling among investors without providing any evidence or reasoning for this claim. Secondly, the author makes an informal fallacy by using inflammatory rhetoric when they describe Arm's stock as
            • The article contains several fallacies.
            • <br>Firstly, the author uses an appeal to authority by stating that Arm is a darling among investors without providing any evidence or reasoning for this claim. Secondly, the author makes an informal fallacy by using inflammatory rhetoric when they describe Arm's stock as 'soaring 29%', which exaggerates the magnitude of the increase and creates a false sense of urgency.
            • <br>The article also contains a dichotomous depiction when it describes Arm's position in the artificial intelligence boom, suggesting that there are only two options: either Arm is successful or not. This oversimplifies complex issues and ignores other factors that may be at play.
          • Bias (85%)
            The article contains several examples of bias. Firstly, the author uses language that depicts Arm as an 'AI darling' among investors which is a subjective statement and not based on facts. Secondly, the author quotes Masayoshi Son saying that Arm could charge twice as much for its latest instruction set without providing any context or evidence to support this claim. Thirdly, the article uses language such as 'better-than-expected third quarter earnings' which is subjective and can be interpreted differently by different people. Lastly, the author quotes SoftBank saying that Arm has increased more than $61 billion since its report last week without providing any context or evidence to support this claim.
            • Arm shares soared 29% on Monday
              • For the second time in three trading sessions, Arm's daily volume exceeded 100 million shares
                • The stock has almost tripled since Arm's initial public offering in September, closing at $148.97
                • Site Conflicts Of Interest (50%)
                  Kif Leswing has a financial tie to SoftBank Group Corp. and Masayoshi Son as he is an employee of CNBC which is owned by Comcast, a company that owns NBCUniversal which in turn owns Arm.
                  • Author Conflicts Of Interest (50%)
                    Kif Leswing has a conflict of interest on the topics of Arm and Intel as he is an employee at SoftBank Group Corp., which owns both companies. He also has a financial stake in Masayoshi Son's company.

                    70%

                    The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
                    (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

                    A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

                    Arm’s stock surge burns short sellers, to tune of $445 million in paper losses

                    MarketWatch Emily Bary Tuesday, 13 February 2024 07:07
                    • Unique Points
                      • Arm Holdings PLC's stock had its best day on record with a 48% daily surge
                      • Short sellers in the process were scorched and racked up $445 million in paper losses as Arm Holdings PLC's stock ARM, +29.30%, exploded higher
                      • Those who made bearish bets against the sector are down more than $7 billion in mark-to-market losses so far this year and about a fifth of those losses came on Thursday alone
                    • Accuracy
                      • Arm Holdings PLC's stock ARM, +29.30%, exploded higher
                    • Deception (50%)
                      The article is deceptive in several ways. Firstly, the author uses sensationalist language such as 'burns short sellers' and 'scorched', which exaggerates the impact of Arm Holdings PLC's stock surge on short sellers. Secondly, the author quotes S3 Partners to provide information about paper losses incurred by shorts but fails to disclose that S3 is a financial technology company that provides data analytics services and not an independent source. Thirdly, the article implies that Arm Holdings PLC's stock surge has proven its success as an early AI winner without providing any evidence or context for this claim.
                      • The author uses sensationalist language such as 'burns short sellers' and 'scorched', which exaggerates the impact of Arm Holdings PLC's stock surge on short sellers. For example, the sentence says:
                    • Fallacies (85%)
                      The article contains several examples of informal fallacies. The author uses inflammatory rhetoric by describing the short sellers' losses as a 'burn', which is an exaggeration and not factual. Additionally, the author quotes Ihor Dusaniwsky from S3 Partners who makes an appeal to authority when he says that shorts have not been profitable this year. The article also contains examples of dichotomous depictions by describing Arm's stock as having its 'best day on record', which is a subjective statement and not factual. Finally, the author uses inflammatory rhetoric again by saying that short sellers are down more than $7 billion in mark-to-market losses so far this year.
                      • The article describes the short sellers' losses as a 'burn', which is an exaggeration and not factual.
                      • Ihor Dusaniwsky from S3 Partners makes an appeal to authority when he says that shorts have not been profitable this year.
                      • The article contains examples of dichotomous depictions by describing Arm's stock as having its 'best day on record', which is a subjective statement and not factual.
                      • Finally, the author uses inflammatory rhetoric again by saying that short sellers are down more than $7 billion in mark-to-market losses so far this year.
                    • Bias (85%)
                      The article contains examples of religious bias and monetary bias. The author uses language that depicts one side as extreme or unreasonable by saying 'white supremacists online celebrated the reference to the racist and antisemitic conspiracy.' This is an example of religious bias because it implies that white supremacy is a religion, which it isn't. Additionally, the article mentions Vivek Ramaswamy as being dog-whistling to supporters of extremist far-right ideologies and wild conspiracy theories like QAnon. This is an example of monetary bias because it implies that supporting these ideas will lead to financial gain.
                      • Vivek Ramaswamy has been dog-whistling to supporters of extremist far-right ideologies and wild conspiracy theories like QAnon.
                        • white supremacists online celebrated the reference to the racist and antisemitic conspiracy.
                        • Site Conflicts Of Interest (50%)
                          Emily Bary has a conflict of interest on the topics of Arm Holdings PLC and short selling as she is an analyst at S3 Partners which provides research services to investors. She also has a personal relationship with Ihor Dusaniwsky who is CEO of Monolithic Power Systems Inc.
                          • Author Conflicts Of Interest (50%)
                            Emily Bary has a conflict of interest on the topics of Arm Holdings PLC and short selling as she is an analyst at Goldman Sachs which provides investment banking services to Arm Holdings. She also has a personal relationship with Ihor Dusaniwsky who is CEO of S3 Partners, one of her sources.