(This September 14 story was corrected to show that shares opened up 10%, not 18%, in paragraph 2)
By Saqib Iqbal Ahmed
NEW YORK (RockedBuzz via Reuters) – Investors looking to bet against a surge in shares of newly formed Arm Holdings may have to wait at least a day before the stock becomes available for short selling, analysts said.
Making its Nasdaq debut Thursday, shares of SoftBank’s Arm Holdings opened 10% above its offering price, valuing the British chip designer at nearly $60 billion upon its return to public markets after seven years.
Short sellers aiming to sell borrowed shares to buy them back at a profit, however, may have to bide their time as the newly minted shares may not be available to borrow for shorting yet.
Investors can start shorting shares as soon as their broker has reasonable grounds to believe the stock can be borrowed – in market parlance, being able to “locate” the shares, said Ihor Dusaniwsky, administrator delegate of predictive analytics at S3 Partners.
Prime brokers or brokerages usually wait until at least a day after the IPO to give a “tracking” of the shares, to get an idea of how many shares end up in lending or marginal accounts, Dusaniwsky said.
Investors looking to trade options ARMs, another avenue to bet on the future price of stocks, may have to wait until next week as some regulatory requirements on trading thresholds must be met before options exchanges can list contracts on the new listed options. actions.
“I have every reason to believe that when ARM options list they will be very popular,” said Steve Sosnick, chief strategist at Interactive Brokers.
ARM shares rose 15.80% to $59.06.
(Reporting by Saqib Iqbal Ahmed; Editing by Nick Zieminski)