Aston Martin hits the skids
Shares slide as much as 8pc on market debut
SHARES in Aston Martin tumbled on their first day of trading in London as investors baulked at the value put on it by bankers.
In one of the most eagerly anticipated stock market listings of the year, the luxury car maker was valued at £4.3bn when its shares began changing hands at £19 each.
A wave of interest sent the stock up to 1920p in early trading but were more than 8pc below their opening price at around 1744p before closing at 1810p last night.
That valued it at £4bn, leaving it facing an uphill struggle to win a place in the FTSE 100. Aston Martin, a favourite of James Bond, is now valued at around the same as Italy’s Ferrari.
Investors appeared unconvinced the brand, which has gone bust seven times in 105 years, was worth the £4.3bn value put on it by bankers in the initial public offering (IPO). Analysts pointed to concerns about whether the Warwickshirebased firm, which sells cars for around £160,000, could live up to its ambitious growth plans.
Banks had tried to price the stock at up to 2250p, valuing the company at £5.1bn, before lowering the offer price this week.
Chief executive Andy Palmer, 55, who is in line for shares worth around £25m at the current price, attended the London Stock Exchange in person to open trading, and said he was focused on the longer term.
He said: ‘We have taken 105 years to get an IPO. I don’t think we’re going to worry too much about what the initial shares are doing. We are delighted by the positive response we have received from investors across the world.’
Aston Martin’s performance came as peer- to- peer lender Funding Circle crashed below its offer price, sparking criticism that stock was overpriced.
One top City venture capitalist said: ‘ It’s just bankers being greedy.’ Experts at AJ Bell said: ‘Aston Martin has a very aggressive expansion plan which means the bar has been set very high in terms of market expectations.’
Deutsche Bank, Goldman Sachs, JP Morgan, Lazard, Bank of America, Credit Suisse, HSBC, UniCredit, CI Capital Investment Banking, Houlihan Lokey, Mediobanca and Numis worked on the Aston Martin deal. Merrill Lynch, Goldman, Morgan Stanley and Numis worked on the Funding Circle deal.
Aston Martin sold around £876m worth of cars last year and is aiming to sell around 6,400 cars this year. But it plans to ramp up production to near 14,000.
Jordan Hiscott, chief trader at Ayondo Markets, said: ‘Many will look with trepidation that in the brand’s 105-year history, the company has technically gone bust seven times.’
Michael Hewson, the chief market analyst at CMC Markets, said: ‘Even Ferrari, when it first floated in 2015, saw its share price fall 40pc in the first six months of trading. Putting that to one side, the prognosis does look positive.’