Is bumpy ride for Aston Martin IPO justified?

For what is the most recognisable brand name to float on the London Stock Exchange this year - and easily the most glamorous - Aston Martin has had an unexpectedly bumpy drive towards its Initial Public Offering (IPO) today.
The financial press disobligingly made much of the fact that the carmaker, which dates back to 1913, has gone bankrupt seven times in its history.There were also suggestions that the valuation of the company was too rich.The initial range published for Aston Martin's shares was between €17.50 each and €22.50 each, valuing the company at between €4bn-€5.1bn.This was later narrowed to €18.50-€20, valuing the carmaker at between €4.25bn-€4.5bn.
Is bumpy ride for Aston Martin IPO justified?

Aston Martin makes its debut on the London Stock Exchange
At the higher end of that range, it was pointed out, shares of Aston Martin would have been valued at 22 times earnings, compared with just 21 times for Ferrari, the closest quoted peer the British company has.This, some observers suggested, over-valued Aston Martin. The influential Lex column in the Financial Times said it was "an audaciously expensive" valuation and noted that, while being rated more highly than Ferrari, Aston Martin's profit margins were not as strong as the Italian carmaker.In the event, Aston Martin's shares were priced at €19, valuing it at €4.33bn. They have fallen in trading this morning and at one point were as low as €17.45p.Not that Andy Palmer, Aston Martin's chief executive and the man who has brought the company to today's milestone, was complaining.He told Sky News he wanted the company to be judged on its performance over the next few years rather than one morning's movement in the shares.
Is bumpy ride for Aston Martin IPO justified?

Andy Palmer joined Aston Martin in 2014
Mr Palmer, a working class boy from the West Midlands who left school at 16 to become an apprentice at local firm UK Automotive Products and who joined Aston Martin from Nissan in 2014, could instead take pride in the fact that this is the first British carmaker to be listed on the London Stock Exchange since Jaguar, a founder member of the FTSE-100, was taken over by Ford in 1990.In a Union Jack-bedecked Paternoster Square, outside the stock exchange building, there was no sign of any scepticism towards the company.The City of London Corporation's notoriously fussy officials had given their permission for a display of Aston Martins old and new, including the €2.5m Valkyrie "hyper car" and the iconic DB5 driven by Sean Connery as James Bond in Goldfinger, which attracted a steady stream of admirers from nearby offices.One City gent, declaring himself an owner of a DB9, stepped forward to shake Mr Palmer's hand and congratulate him on the flotation.
Is bumpy ride for Aston Martin IPO justified?

The DB5 used by Sean Connery in James Bond movie Goldfinger outside the LSE
Aston Martin is raising no new money from the flotation, the biggest so far in 2018 on the London Stock Exchange, in which a quarter of the company's shares were sold.The listing of Aston Martin Lagonda Global Holdings, to give the company its full name, was merely to enable existing shareholders, including Italian private equity firm InvestIndustrial and the Kuwaiti firms Adeem Investments and Primewagon, to take some money off the table.
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