Arm Holdings (ARM): *IPO* New Position

Arm Holdings (ARM) returned to the public markets on Thursday after being acquired by SoftBank back in 2016. The company manufacturers CPUs, GPUs, and a variety of other high-powered, low-energy semiconductors for a myriad of sectors ranging from cell phones to video game consolers to automobiles and everything in-between.

Way back in the early 2010s, I held an investment in ARM in its first round in the public markets, so I had been keeping an eye on this one for its Initial Public Offering (IPO). Given that the company is incredibly highly valued, I made a number of small buys on Thursday giving me an average per-share cost of $57.28.

Since ARM also has direct exposure to the Artificial Intelligence sector, I am not giving a full allocation to this position, rather rolling it in with the Old-Spec Basket. Why not the New-Spec Basket? ARM’s IPO is new but the Cambridge-based company is not, having been founded in 1990.

IPOs are notoriously volatile, so I only purchased around 15% of my total allocation. I will be waiting for more price action if I add any higher than my initial cost basis, but my next lower buy target is $50.14, slightly above the key psychological level of $50.00.

Despite the position being brand-new and smaller than what I hope to achieve, I will take profits if it doubles with my next sell target around $120.00. To be clear, I do not anticipate this happening as ARM is already overvalued by any metric, however, whenever the market feels like a mania, it’s time to take something off the table, and ARM gets to $120, we will definitely be in a mania.

ARM closed the week at $60.84, up +6.22% from where I opened my position.

Dow Chemical (DOW): Dividend Reinvestment

Dow Chemical (DOW) paid out its quarterly dividend on Monday, September 11, which, after reinvesting, raised my per-share cost +1.21% from -$0.330 up to -$0.326 (a negative per-share cost indicates all capital has been removed in addition to $0.326 per share added to the portfolio’s bottom line in addition to each share’s current value).

The reason my per-share cost was raised is because there are now more shares splitting the same amount of profit. The position has become more profitable because of the additional shares, but the per-share “cost” is higher because of the additional shares.

From here, my next buy target is $43.89, just above DOW’s 2022 low, and my next sell target is $61.12, a bit higher than Dow Chemical’s 2023 high, but just under a point of resistance which DOW has seen many times over the past few years.