On Friday MainFT reported that Arm’s $5bn IPO is five times oversubscribed. Soon afterwards Reuters reported that the book is actually six times covered. By the time orders closes on Wednesday, it might be like the amplifier in Spinal Tap and go to 11. Or more!

Does this mean that the float is a blowout? No. Leaks like this mean nothing. Seriously. Just ignore.

Investors routinely overstate the size of their interest in an IPO. Hedge funds especially. They know that companies and underwriters will favour so-called “l(fā)ong-only” investors in allocating IPO shares, and so they will inflate their order, often at the outset, to give themselves some optionality around the deal. Based on long experience, the bank syndicate desks know they can allocate only a certain percentage of a hedge fund order. Long-only institutions also puff up their interest too, although usually not to the same extent.