Should you invest in Softbank’s ARM IPO?

First, some house keeping. Check out my podcast on YouTube, my subscribers jumped from 100 to 3.5k in 3 weeks. After not making any investments for 18 months I am investing in a startup and if you want to co-invest with me, feel free to reach out or check this link out for details.

Now to the weekly programming.

1/ Should you invest in a Softbank’s ARM IPO? The data says No.

Softbank took ARM private in 2016 for $32B. And its now coming to public markets at an estimated valuation around $50B. But as a retail investor interested in tech should you consider investing in ARM? The data says no.

Out of 25 companies backed by Softbank which went public, only 4 companies are above their IPO price. And the average loss in the 21 companies that are below IPO price is a whopping 45%.

Knowing these numbers I wouldn’t touch ARM IPO, and instead wait to see the price settle down. If the subscription interest claims recently are true that its at 6 times over subscribed. Its clear that large companies are going to take stake in ARM because of its strategic importance. Google, Apple, TSMC, Intel all have an interest for ARM to stay a neutral player in the chips game.

This will be the main reason why ARM’s IPO will succeed. But as a retail investor don’t be influenced by the IPO FOMO.

2/ Reason why 14 Toyota manufacturing plants shut down last week

As some one who works in developing storage products at Azure this story is fascinating. Last week 14 manufacturing plants of Toyota shut down. The reason was a botched IT maintenance issue which became an issue with disk full memory across bunch of servers. And the back up mechanism to switch disks was not working which ultimately took down the IT systems and the manufacturing plants. Almost all IT departments have a backup mechanisms designed to handle different failure scenarios from disk failure, VM failure, network failure, region failure & data center failures. Some thing as common as a disk full error taking 14 manufacturing plants down is fascinating.

3/ You are what you consume

The one conversation you should listen to this week if you are interested in what is happening in India’s venture capital scene and how India’s top VCs are thinking, its the conversation Nitin Kamath hosted on his YouTube channel. My take away in this conversation was both the Kamath brothers were feeling that investing in VC funds in India was not the best way to use their money & it seemed like they were hinting at the hypocrisy of valuations at which startup equity is being dumped to Indian retail investors. One point that the VCs bought briefly but didn’t delve deep into it was that its not all the fault of VCs that this was happening its the founders who are making most of those decisions. I particularly enjoyed Blume Ventures co-founder Karthik’s view and seemed like had original thoughts while the other two VCs were boringly non-original.