Aston Martin Shares Now Down 75% Since Carmaker Went Public

(Bloomberg) -- Aston Martin Lagonda shares are now worth less than a quarter of what they were when the U.K. luxury car-maker went public 10 months ago, making it the worst-performing new listing on London’s main market in more than two years.

The stock plunged as much as 22% on Wednesday after the company reported a first-half operating loss and as Chief Financial Officer Mark Wilson said that the company may seek additional financing if needed.

The decline adds to a 39% drop over two days last week when the sports-car company cut its full-year sales forecast. The shares were trading at 452 pence as of 9:24 a.m. in London, compared with 1,900 pence in their debut in October. It’s also now the third-worst performing stock in the U.K. mid-cap FTSE 250 benchmark this year, exceeded only by troubled challenger bank Metro Bank Plc and U.K. lending-platform operator Funding Circle Holdings Plc.

“Cash is primary concern at this point,” Goldman Sachs analyst George Galliers wrote in a note to clients. Free cash flow reported by Aston Martin Wednesday was 96 million pounds ($117 million) weaker than expected, the analyst said. The root cause of the company’s issues is lower-than-expected demand for its products at current prices, he said.

Analysts at Panmure Gordon and Jefferies both speculated about whether Aston Martin would need to raise funds, potentially via a rights offering, after the company cut its unit sales outlook last week. Bank of America Merrill Lynch analysts downgraded the stock to neutral from buy on Tuesday, saying that options for the carmaker include an equity increase of up to 500 million pounds and that the company’s troubles may turn it into a takeover target.

Aston Martin’s post-IPO tumble just exceeds the 74% slump for Funding Circle since its debut in September, making it the worst-performing new listing since mattress retailer Eve Sleep Plc, which has dropped 94% since it started trading in May 2017.

--With assistance from Gaurav Panchal and William Canny.

To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Paul Jarvis

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