The Story Behind Aston Martin’s IPO

,Few cars signal luxury and glamor as much as an Aston Martin does. The company was founded in 1913, and it has remained relevant ever since. James Bond drove the DB5 in “Goldfinger” back in 1964, etching it into our collective cultural consciousness as one of the coolest cars you could possibly drive. However, despite its popularity, the company has long stayed private. Just as the cars themselves are inaccessible to the average person, costing hundreds of thousands of dollars to buy, it is also inaccessible to get some equity in the company. However, this changed in October 2018 when Aston Martin went public. Maybe most people couldn’t afford an Aston Martin, but for £19 they could get a share in the company, which was worth £4.3 billion. There was a lot of excitement for the IPO, which was long in the waiting, and following Brexit it gave British citizens an iconic homegrown brand to invest in. One of the reasons they may have finally gone public was because their Vantage model at the time had become a huge success. Launched in 1972, the Vantage has seen numerous models over the years, and its 2018 models quickly sold out. The company had also been increasing its manufacturing, delivering five thousand vehicles in 2007 which was the most they had done in a decade. With demand for their cars booming, getting some new investment would help them ramp up the supply.

Not everybody was so excited about the IPO. Some felt that its success for over a century was because of the control that its owners had over it. They focused on quality and consistency rather than growth and expansion. Once the public got its hands on the company, that focus could change. New investment also means the company could overshoot. If investors jump in, Aston Martin could end up oversupplying the market, which by nature has limited demand due to the high-cost point for luxury vehicles. This could bring down both the quality and the brand image they have spent over a century cultivating. There were good reasons to stay private, but the temptation of growth got to the owners. They made the move to go public while Brexit was being negotiated, which meant that there was a lot of uncertainty in the London Stock Exchange. However, the market was still booming, and not jumping in may have seemed just as risky, and there also may have been a nationalistic angle of wanting to prove that Britain didn’t need the rest of Europe. Ultimately, though, those who were optimistic for the company’s market performance ended up losing their money. The stock price has collapsed since the IPO, and the company’s market cap is a fraction of what it once was.