Luxury car company Aston Martin taps the IPO market
There are many cars on the roads today, but one iconic car company that counts famous movie spy James Bond as a customer is going public. That’s right, well known expensive sports car company Aston Marton is selling shares to the public joining Ferrari as one of the pure-play publicly traded companies that focus on higher end, luxury cars. This action also adds another company for us to consider for our Living the Living investing theme, and we see Aston Martin’s 2017 sales of more than 5,000 cars — its best level in nine years — as a confirming data point for that investing theme. It will come down to the usual combination of earnings and valuation, especially as they stack up again Ferrari.
The favorite carmaker of fictional British secret service agent James Bond announced plans Thursday to sell shares for up to £22.50 ($29.75) each in its initial public offering, giving the company a market value of as much as £5.1 billion ($6.7 billion).
Aston Martin said that the final price would be announced early next month, and shares would start trading in London on October 8.
In going public, the British company is betting that its growth story will help investors overcome fears about US threats to tax foreign autos and the potential for Britain’s planned exit from the European Union to disrupt supply chains and markets.
Aston Martin has in recent years sought to capitalize on its high-end brand. But analysts at Bernstein see several potential problems.
They argue the Aston Martin brand is not as strong as that of Ferrari, which is bolstered by decades of racing history and a slew of Formula 1 championships. The British automaker also has much tighter margins that its Italian rival, and a worrying historic sales record.
Source: Aston Martin is trying to catch Ferrari with its $6.7 billion IPO
