Aston Martin Lagonda Global Holdings PLC’s (GB:AML) chairman, Lawrence Stroll, has sold his stake worth £117 million in the company. This news came after the Chinese automobile manufacturer Geely announced increasing its investment in the luxury automotive company.
The company’s stock witnessed a surge of nearly 10% yesterday after the news. Over the last six months, the stock has gained 109.8%.
The Deal
Geely acquired 42 million shares from Stroll’s company, Yew Tree, and invested £234 million in Aston Martin. Post-divestiture, Stroll still retains the position of the largest shareholder with a 21% stake. In addition, Geely’s stake will increase from 7.6% to 17%, solidifying its position as the third-largest shareholder.
The partnership with Geely has the potential to steer the luxury brand towards a greater emphasis on electric mobility. Furthermore, this partnership will grant Aston Martin valuable insights into the pivotal growth market of China, which the company has been actively targeting.
Aston Martin has recently been in the news for their performance in the F1 team. However, given Stroll’s divestment of his stocks, there is now speculation about whether he intends to make a significant departure soon.
Stroll commented, “This transaction enables the creation of a long-term partnership with Geely – a relationship that I believe will bring very significant value for all of our shareholders over time.”
What is the Price Target for Aston Martin?
AML stock has a Hold rating on TipRanks, based on five Hold, two Sell, and one Buy recommendations.
The average price target is 214.43p, which is 24.8% lower than the current trading price.
