Martin… Aston Martin… Licensed To Sell Shares As IPO Reaches £4bn
Aston Martin debuted on the stock market this week with a disappointing showing. The company touted in IPO estimated to be in the region of £5bn. Shares in the luxury carmaker opened at £19 and dipped as low as £17.75. That’s a market value of £4bn, lower than the optimistic £5bn price tag. If you are looking to buy shares in Aston Martin you are going to have to wait until Monday.
Aston Martin is trading 25 percent of its shares, initially to institutional investors. Monday is when trading is opened to private investors.
So if you are a private buyer interested in acquiring a bit of Aston Martin now is the time when share prices are at their lowest. Shares can go up or down depending on a number of factors.
Confidence plays a big part in how shares are valued. So if the CEO, Andy Palmer, suddenly left, the company’s share price would fall.
Palmer won’t be walking any time soon. As CEO he is in a position to make a very good deal for himself. A CEO of any company has many perks written into a contract.
Palmer earns a salary of £1.2m per year plus a maximum bonus of £2.4m. He also has a 0.6 percent stake in the company.
Based on current share valuation Andy Palmer’s stake is worth £24m. A stock market IPO is aimed at raising money for Aston Martin to reinvest in the company’s future.
However, IPO’s are also a good way to enrich internal shareholders. So Andy Palmer is just a small beneficiary of the stock market listing.
Majority shareholders within the company will make much more as a result of the IPO. That’s the nature of listing a company on the stock markets.
The company benefits and the internal shareholder’s benefit. That includes company employees who make up the institutional investors. Everyone’s a winner.
Palmer is entitled to such generosity. The former Nissan executive has turned Aston Martin into a profit-making machine. They are relatively small profits but profits nonetheless.
Aston Martin had been losing money for years, production volumes were down to as low as 2,000 units per year around 7 years ago.
Since Palmer became the CEO of Aston Martin he has revitalised the product lineup. The company sold a record 5,098 cars in 2017 and expects to sell around 6400 cars in 2018.
The United Kingdom is the biggest market accounting for 30 percent of worldwide sales. Yet Aston Martin is a global company. Palmer believes Brexit will have no impact no impact on sales.