Aston Martin stutters on stock market debut as shares slip

Ivan Schwartz
October 5, 2018

Aston Martin's trading debut floundered after investors balked at a valuation that had put the United Kingdom luxury carmaker on par with larger and more profitable Italian competitor Ferrari NV.

Aston Martin floated on the London Stock Exchange at 8:00 [BST] this morning at a price of £19 per share, giving the British manufacturer, which can now be seen on stock exchange listings as "AML", a brand value of £4.33 billion ($5,607,350,000).

The shares fell to as low as 17.75 pounds and were down 5 percent at 0935 GMT.

Before the flotation, Aston has revealed a guide price of between £17.50 (Rs 1,664) and £22.50 (Rs 2,140) per ordinary share.

Aston Martin's IPO valuation was 20.7 times first-half earnings, according to Bloomberg data, close to the current share multiple of 21 times expected 2018 profit for Ferrari, which also has a stronger balance sheet.

Aston Martin sold around 25 per cent of its stock, with the offer open to institutional investors, company staff, customers and members of the Aston Martin Owners Club in the UK.

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The decision to float Aston has been always been mooted as sales continue to grow, with new products such as the DB11 and Vantage ensuring the company's financial outlook is strong.

Nevertheless, the 105-year-old company - based in Gaydon in central England - has a troubled history and has declared itself bankrupt multiple times in the past.

Its shareholders, which include Italian investment firm Investindustrial and a group of Kuwait-based investors, sold a quarter of the company's stock in the initial public offering (IPO). Daimler, which owns Mercedes-Benz, was said to be keeping a 4.9 percent stake in Aston Martin following the IPO.

Brexit was thought of as a potential issue for Aston Martin, but Palmer insists that Britain's impending exit from the union wouldn't have too much of a bearing on the company, saying that it was "relatively well insulated" from the effects of Brexit.

Palmer said he was "delighted" with the response to the IPO, describing it as a milestone for the company and pledging to deliver on growth plans.

It is the first United Kingdom carmaker to sell shares in years and has a glamorous association with James Bond films.

Other reports by GizPress

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