New Straits Times
ASTON MARTIN DEBUT FAILS TO DAZZLE
CEO says company will look over longer term as shares slip 4.7pc on debut day
ANDY Palmer has spent a good part of his time at the helm of Aston Martin spreading the word that the luxury sports-car maker should command the high valuations of its rival Ferrari NV, and slapping the United Kingdom brand on yachts, upscale baby strollers and even submarines.
By the start of trading on Wednesday on the London Stock Exchange, the chief executive officer had largely succeeded. Aston Martin was priced at £19 (RM101.84) a share in an initial public offering (IPO), on par with Ferrari’s lofty profit multiples. But by day’s end, the stock had slipped 4.7 per cent — proving Palmer has a lot to do to convince investors of his vision for the England-based company.
“We’ve taken 105 years to get to an IPO, we are not going to worry much on what the initial shares are doing. We will always look over the longer term,” said Palmer.
Analysts were never so sure that the comparison was warranted. Ferrari is more profitable and has a stronger balance sheet, generating piles of cash.
Palmer had spent the final two weeks before the IPO in a sprint, pitching the deal to more than 350 investors across the globe.
But as the stock listing approached, it became clear the upper end of the original target of £22.50 — which would have valued it at a Ferrari-topping £5.1 billion — was out of reach.
“They priced it pretty well, getting that valuation. There is very little left until people see some numbers and are willing to take more risk,” said Evercore ISI analyst Arndt Ellinghorst.
Palmer pointed out that Ferrari lost 38 per cent in its first four months of trading. It’s long since recovered, and is up 36 per cent this year to a US$25.8 billion (RM106.9 billion) market value.
The British manufacturer, now known as Aston Martin Lagonda Global Holdings Plc, is still working to expand its presence in the sports-car world with the Vanquish, Vantage and DB models.