Shares in esteemed sportscar manufacturer Aston Martin soared 22% yesterday, after Chinese automotive company Geely announced an investment of £234m (~$290m) in the beleaguered British brand. The deal increases Geely’s stake in the company to 17%, completing a roster of high-profile shareholders that includes Canadian businessman Lawrence Stroll, whose consortium owns a substantial 21%, and the Saudi Arabia Public Investment Fund, which holds 18%.
Shaken, undeterred
Aston Martin has always positioned itself as the epitome of luxury; with its smooth, powerful and sleek cars winning fans around the world as James Bond’s go-to getaway car. But the company’s own corporate history is anything but smooth. The 110-year-old company has maneuvered its way through 7 bankruptcies in its history – with some of its most difficult years coming after its disastrous 2018 IPO. Since going public, Aston Martin’s shares have cratered, as investors lost faith that the company would be able to get its mountain of debt under control at the same time as launching its first ever SUV and its $3m hypercar Valkyrie.
Expensive cars, cheap shares
The latest deal is not the first time Geely has shown interest in owning the brand. In 2020, Aston’s board opted for a deal from Lawrence Stroll, rather than a rival bid from Geely, to try and rescue the company. Under his leadership, the company has continued with an ambitious turnaround plan, most notably re-entering the sport of Formula 1, just as the sport’s popularity was soaring. However, despite an average selling price north of $250k per car, persistent cost overruns have meant big losses for Aston Martin - forcing the company back to the negotiating table to raise cash over and over again, at increasingly deep discounts.
