Aston Martin IPO could be worth $6.7 billion

Aston Martin's initial public offering aims to give the company the finances it needs to develop new models for the future. 25% of the company will be floated on the London Stock Exchange.

Aston Martin is to become one of the first British carmakers in decades to form an initial public offering. The prestigious marque is seeking a valuation of $6.7 billion (£5.07 billion) and aims to use the funds generated to propel the company forward with new products.

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As well as being well known as James Bond’s transportation of choice, Aston Martin has a history that spans over 100 years and contains many iconic cars. From the legendary DBR1, Ferrari challenging DB4, and of course 007’s famed DB5 all earn a spot in the automotive hall of fame. While Aston’s past is to be celebrated, this IPO is all about the future and making sure the company has the investment it needs going forwards.

Previous Aston Martin custodians struggled with the financials of the company, but the gains from this IPO will help it remain relevant as the British brand continues to explore electrification and its new DBX SUV.

Its most recent foray of creating continuation models of select cars from its past has also proven fruitful. A batch of DB4 GTs all found homes and a recently announced run of 25 ‘Goldfinger’ DB5s are sure to do the same. Just days ago there was an announcement that the rare DB4 GT Zagato would be the next historic model brought back to life.

However, it might not be all plain sailing for Aston Martin in the years to come. Investors will be carefully monitoring the current Brexit negotiations to see what impact they might have on the company. If the UK leaves the European Union without a trade deal, Aston Martins exported to Europe will be subject to taxation and an increased price for buyers. A stockpile of parts in the UK has been built-up incase frictionless trade ends in March 2019.

'If there are tariffs ... for every car we lose because of a 10 percent tariff into Europe, we presumably pick up from Ferrari and Lamborghini in the other direction because obviously their cars become more expensive in the UK,' Aston Martin CEO Andy Palmer told Reuters.

Aston Martin shares are estimated to be priced between £17.50 and £22.50 per share with 25% of the company to be floated on the London Stock Exchange. Considering the brand’s strong lineup of models, the number of interesting new products on the way, not to mention the launch of Lagonda as an all-electric sub-brand, these shares could be a great investment.

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