Both companies were among the most eagerly awaited IPOs when they come to market. They both dove initially, Ferrari recovered to become the Aristocrat of the sector, and Aston Martin is perhaps the disastrous stock market float ever.
It was a major blow for investors who backed the ill-fated IPO. By the end of its 1st day of trading, the shares had crashed by 25%, it was 1 of the worst debuts in the history of the LSE.
Both companies have been described as “marmite stocks” investors either buy into the growth story and love them, or they do not. With hindsight, though, the warning signals were there from the Aston’s 1st roadshows.
Aston Martin had initially imagined it would be accorded a rating as fancy as that of Ferrari, and a price of $6-B ish was bandied about in The City, along with talk of a place in the FTSE 100.
No chance, as the price was later lowered about $5-B, and now the company, which reported annual losses of about $100-M in February, is valued at less than $3-B. As I said then a place in the blue chip FTSE 100 is way out of reach, and it the US it is quoted on the Pinks.
The stock market is a very unforgiving place for companies that fail to deliver on forecasts, particularly those made in an IPO just months earlier.
Aston Martin has managed to find some forgiveness for its dismal share price performance from its largest shareholder, the Italian private equity group Investindustrial Advisors.
It is proposing to up its stake from 31 to 34% in what’s been seen as a vote of confidence in the future of David Brown 106-year-old British sports car marque.
Aston Martin shares dove, but the Italians have at least had the consolation that they cashed out at about 23/share in the IPO, having previously held a stake of around 40%
They clearly see some value in the shares in here, and will also be looking to protect their existing investment. Their move to buy more had the right effect, boosting Aston Martin back above the 12 when it was announced Monday.
HeffX-LTN’s overall technical outlook for ARGGY is Bullish in here, although the stock looks overbought in the short term, Key support is at 12.17, and Key resistance is a 13.32. Stay tuned…
Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.
HeffX-LTN overall technical outlook for RACE is Very Bullish, overhead resistance now stands at 168.85, and strong support at 165.12, all Key indicators are Very Bullish in here. Ferrari finished at 167.51, +2.39 Wednesday in NY.
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