Shares of SoftBank's Arm Holdings closed a volatile session lower on Friday, a day after a stellar Nasdaq debut that valued the British chip designer at $65 billion.
On Thursday, Arm's shares closed up nearly 25% at $63.59, lifting hopes of an end to the drought in U.S. listings. The IPO had priced at $51.
Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin, Texas, attributed the stock's turnaround on Friday to a combination of how much the shares had jumped in the previous session and skittishness on a generally weak day for stocks. "It's not uncommon for any stock that shoots up quickly to see at least a little bit of profit-taking right after that, IPO or not," he said.
Some strategists said trading volatility in the stock may be tied to the limited number of publicly traded shares, as SoftBank continues to own about a 90% stake. "Clearly there are investors interested in this company. But limited float issues of this type can be very volatile," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "Ultimately, it was pulled down at the end of the day by the weakness in Nasdaq."
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