AML - Stock Market Listing

[Minglar]

alscar said:

LTP said:

Jazzy Jag said:

Wow.Really feel for the staff members who were encouraged to but at the peak, some of whom remortgaged houses to get in on the floatation.

Never ceases to amaze me how this canard grows with the retelling (unless you have some evidence?) - at the time it was people using the funds for their bathroom makeover; now it's remortgaging. Nobody was "encouraged" and if anyone remortgages their primary home to invest in a share floatation then, as the old adage goes, you should never invest funds in a speculation that you can't afford to lose. This is why I never owned any AML shares.

Edited by LTP on Thursday 12th March 13:58

I don t know about remortgaging but some staff ( perhaps more junior and those that knew no better ) were encouraged or at least strongly suggested a good idea to buy shares - I heard this via 2 separate managers plus another individual well connected.
Some supposedly borrowed money to facilitate this.
No idea whether 100% true but all individuals would have zero reason to not be truthful .

I remember posts on here alscar, in this very thread, and as you say I had and have no reason to doubt them. I just had a trawl back to the stock split I mentioned, and it starts around page 100 of this thread. Let’s not forget that AP was an architect of the IPO and it enabled the existing shareholders at the time to cash out of their investment nicely. He also did rather well himself. As an employee at that time it’s not unreasonable to assume people got swept up in the marketing wave and wanted to get involved. Why wouldn’t you? There were also bankers on here who were privy to the process and no doubt did well out of it fee wise too. Unfortunately over time very little ever changes. Retail Shareholders are always at the bottom of the pile, and history looks very likely to repeat itself again.

BRM.

[Jazzy Jag]

LTP said:

Jazzy Jag said:

Wow.Really feel for the staff members who were encouraged to but at the peak, some of whom remortgaged houses to get in on the floatation.

Never ceases to amaze me how this canard grows with the retelling (unless you have some evidence?) -

I spent just over 5 years working there, with these people.
My evidence is from the horses mouth, so-to-speak.

[LTP]

Minglar said:

LTP, I think you may need to check some of your data there as £7 in July 2021 is not the same as £7 compared to the IPO launch price because there was a 1/20 stock split in December 2020. AP left in May 2020, shortly after LS/YT invested. Towards the end of 2019 when the stupid leasing deals were being offered on new Vantage the AML SP had by then shed circa 95% of its IPO launch value. So I would question your 37% quote. BRM.

Richard, I get your point about the dilution, the effect on the face value and the various other machinations, but I'm a simple soul. If I wanted to buy a share in AML at the IPO it would have cost me £19; if I wanted to buy a share in AML in July 2021 it would have cost me £7; If I want to buy a share now it would cost me £0.43.

[LTP]

Jazzy Jag said:

I spent just over 5 years working there, with these people.
My evidence is from the horses mouth, so-to-speak.

Funnily enough, I did about 6 years at Gaydon. Never heard about anyone remortgaging to buy shares.

[Jon39]

I feel very sorry, especially for employees who bought AML shares at the time of the IPO.
Unfortunately if someone has no previous experience of share ownership, they might not know, but they are taking a huge risk by purchasing shares in a loss making business.

There was an isolated profitable year announced immediately prior to the IPO, but then a similar amount was written off in the following year, due to a buyer of something called IP rights and tooling, failing to pay. Consequently even that reported profit was debatable.

As can be seen on this topic at the time of the IPO, opinions were divided between those of us who realised the pre-IPO hype was overdone and others who thought the share price would increase sufficiently for entry into the FTSE 100 and that AML would rival Ferrari's profitability.

I was accused by one poster, of using a very out dated business valuation method.. He considered the AML flotation share price was perfectly justified. Within two years the market had made matters very clear

How the century long record of losses, under numerous different owners, could suddenly be magically transformed into consistant profitability, was something that I could not understand.
A share price will only increase (genuinely) when profits increase. It is therefore quite normal for the opposite to happen, which it did.

[Jon39]

LTP said:

Richard, I get your point about the dilution, the effect on the face value and the various other machinations, but I'm a simple soul. If I wanted to buy a share in AML at the IPO it would have cost me £19; if I wanted to buy a share in AML in July 2021 it would have cost me £7; If I want to buy a share now it would cost me £0.43.

You are quite correct, but you would not have obtained the same amount of company ownership with those purchases. The prices in this case are not comparable.

One IPO share (percentage ownership of the company), was a much larger portion, than the 43p share today.
Think of two cakes, where each cake is sliced and each slice is one share. The latest cake has many more slices.

[Minglar]

Jon39 said:

LTP said:

Richard, I get your point about the dilution, the effect on the face value and the various other machinations, but I'm a simple soul. If I wanted to buy a share in AML at the IPO it would have cost me £19; if I wanted to buy a share in AML in July 2021 it would have cost me £7; If I want to buy a share now it would cost me £0.43.

You are quite correct, but you would not have obtained the same amount of company ownership with those purchases. The prices in this case are not comparable.

One IPO share (percentage ownership of the company), was a much larger portion, than the 43p share today.
Think of two cakes, where each cake is sliced and each slice is one share. The latest cake has many more slices.

Exactly Jon. That’s why it’s simply untrue to claim that by July 2021 the SP had fallen by only 37% from the IPO launch price. Sorry LTP. I understand what you’re saying but for someone who is as particular as you usually are and is so tech savvy, I’m a little surprised. When LS/YT invested there was also a RI in April 2020. This stabilised the financials, and led to an almost doubling of the SP in to late 2020, albeit from circa 35p to 70p. When the 1/20 split happened over the weekend of 11th to 14th December, anyone who had a holding of 19 shares or less was scrubbed off the register and lost their investment completely as no fractional shares were issued in the new listing. We all know what has happened since then. Several cash raises, another RI in September 2022, and as you say Jon the number of shares now in circulation is much much higher. As is the amount of debt on the balance sheet. I would argue that the percentage fall of the AM SP between the IPO launch price and July 2021, and from then to now, is pretty much the same, both in the mid 90’s. As I’ve said before without LS/YT there is little doubt AML would have faced another bankruptcy around the time Covid hit the world. We should also be grateful to them for the current range of Aston Martin vehicles which imho is arguably the best range we have ever seen. But history has shown that the IPO was probably one of the worst decisions ever made from a financial perspective, as was pointed out by many people on here in the early days of this thread. Although as with anything financial there are always winners and losers. Investindustrial, AP and the lead bankers who handled the IPO all did rather well. BRM.

[mac_doctor]

Minglar said:

... When the 1/20 split happened over the weekend of 11th to 14th December, anyone who had a holding of 19 shares or less was scrubbed off the register and lost their investment completely as no fractional shares were issued in the new listing. ...

I'm not understanding the word "split" here: surely if there was a 1/20 split then anyone with 19 shares would have got 361 to make 380?

... or does "split" mean "merge" in this context?

[Simpo Two]

mac_doctor said:

I'm not understanding the word "split" here: surely if there was a 1/20 split then anyone with 19 shares would have got 361 to make 380?

... or does "split" mean "merge" in this context?

Seems that way to me. Perhaps the only way to make money on AML shares is to go to Ladbrokes and bet on them falling

[Minglar]

mac_doctor said:

Minglar said:

... When the 1/20 split happened over the weekend of 11th to 14th December, anyone who had a holding of 19 shares or less was scrubbed off the register and lost their investment completely as no fractional shares were issued in the new listing. ...

I'm not understanding the word "split" here: surely if there was a 1/20 split then anyone with 19 shares would have got 361 to make 380?

... or does "split" mean "merge" in this context?

It was the other way around. Perhaps my terminology wasn’t clear. For every 20 shares you owned you received 1 new share, and the opening price on 14th December 2020 in theory should have been 20 times higher than where it closed on Friday 11th. From memory it closed and split at 70.85p on 11th. Anyone who had a tiny amount of stock, 19 shares or below, perhaps just to get a share certificate or feel involved was effectively no longer a share holder when the new shares started trading. I hope that clarifies things and sorry for any confusion. BRM.

[Minglar]

As a very simplistic illustration of how some people may have fared due to the situation, imagine a small Retail Investor bought 20 shares in the IPO but did nothing else afterwards. No participation in any Rights Issues, no buying at lower levels to average, no dealing when prices rose and fell, nothing at all. At £19.00 that is an initial outlay of £380.00. They would now have just one share which is currently trading at roughly 40p. Just let that sink in. I won’t bother to calculate the percentage loss as it’s very clear to see. And if you started off with 19 shares then you lost it all in the split.

BRM.

Edited by Minglar on Friday 13th March 10:37

[LTP]

Minglar said:

Sorry LTP. I understand what you re saying but for someone who is as particular as you usually are and is so tech savvy, I m a little surprised.

I was trying to make a point - perhaps I should have left out the time between the IPO and the start of the graph. I just get a little tired of "It's all Palmer's fault" and the catastrophising - with no evidence - of claims like "Employees remortgaged their homes to buy shares because they were promised the IPO would make them rich as Croesus, and now they're living in a cardboard box in t'middle of t'road.

Apart from the concern over whether the company ceases to exist - and I have long advocated that a company like Aston Martin needs a "big brother" like Ford was and maybe Mercedes should have been - I rarely contribute to this particular thread. I prefer to drive the car rather than ponder the machinations of the Stock Market, which is currently losing its collective mind over AI, just like it did over the dotcom, and the tulip bulbs, and.....ad infinitum

One final comment. I still don't understand how Ferrari do it. Aston Martin poached quite a few Ferrari engineers while I was there (remember the V6 that Moers binned?), and they still couldn't work out how Ferrari did it. I'll leave you to your chicken entrails

[Minglar]

LTP said:

Minglar said:

Sorry LTP. I understand what you re saying but for someone who is as particular as you usually are and is so tech savvy, I m a little surprised.

I was trying to make a point - perhaps I should have left out the time between the IPO and the start of the graph. I just get a little tired of "It's all Palmer's fault" and the catastrophising - with no evidence - of claims like "Employees remortgaged their homes to buy shares because they were promised the IPO would make them rich as Croesus, and now they're living in a cardboard box in t'middle of t'road.

Apart from the concern over whether the company ceases to exist - and I have long advocated that a company like Aston Martin needs a "big brother" like Ford was and maybe Mercedes should have been - I rarely contribute to this particular thread. I prefer to drive the car rather than ponder the machinations of the Stock Market, which is currently losing its collective mind over AI, just like it did over the dotcom, and the tulip bulbs, and.....ad infinitum

One final comment. I still don't understand how Ferrari do it. Aston Martin poached quite a few Ferrari engineers while I was there (remember the V6 that Moers binned?), and they still couldn't work out how Ferrari did it. I'll leave you to your chicken entrails

Fair enough LTP. I apologise for being somewhat pedantic as I knew what you meant. It’s a touchy subject that’s for sure, and I always read and value your input on here, so please accept that wholeheartedly from me. Imho it is definitely not the sole result of anything AP did. I’ve met him before and he’s a solid car man and I am confident he always wanted the best for AML and never envisaged how things would develop after the listing. As for Ferrari I really don’t know what the secret recipe is, but despite their success I’ve never really wanted to own one, apart from maybe an older version, perhaps 355 or earlier. Anyway, once again I apologise how I may have looked in my recent posts. Have a great weekend. BRM.

[LooneyTunes]

LTP said:

One final comment. I still don't understand how Ferrari do it. Aston Martin poached quite a few Ferrari engineers while I was there (remember the V6 that Moers binned?), and they still couldn't work out how Ferrari did it.

The difference isn't really engineering. It's managing the brand and customer experience.

That's not to say that engineering isn't important but the difference in brand/customer experience/relationship that I see between my own experience with AML and friends who own Ferraris is chalk and cheese...

[LTP]

Minglar said:

Fair enough LTP. I apologise for being somewhat pedantic as I knew what you meant. It s a touchy subject that s for sure, and I always read and value your input on here, so please accept that wholeheartedly from me. Imho it is definitely not the sole result of anything AP did. I ve met him before and he s a solid car man and I am confident he always wanted the best for AML and never envisaged how things would develop after the listing. As for Ferrari I really don t know what the secret recipe is, but despite their success I ve never really wanted to own one, apart from maybe an older version, perhaps 355 or earlier. Anyway, once again I apologise how I may have looked in my recent posts. Have a great weekend. BRM.

Absolutely no need for an apology Richard, and I wasn't having a pop at you - more at the anti-Palmer boys.

As well as a good weekend I'll have a great Friday - going to take the wife for lunch in the V8V at Caffeine&Machine "The "Bowl" at Ampthill - about a 3-hour round trip with a pizza in the middle. Only doing it in Tuscany could make it better

Take care

[Dewi 2]

LTP said:

I just get a little tired of "It's all Palmer's fault" and the catastrophising - with no evidence - of claims like "Employees remortgaged their homes to buy shares because they were promised the IPO would make them rich as Croesus, and now they're living in a cardboard box in t'middle of t'road.

I must have missed those posts.

It is normal for plc employers to provide share schemes for their employees, but any recommendations or promises made by an employer, would not be legal.

I enjoyed speaking to Andy Palmer at various events, which even including meeting him at the first post IPO AGM in London.

My only negative thoughts have been about the 'hype' to boost excitement, during the year immediately preceding the IPO. The significant owner at the time quite naturally wanted to sell at the best price, so Andy was only acting appropriately. He did an excellent job securing that £4.3 billion valuation.
Company value at present, £0.414 billion.

[LTP]

Dewi 2 said:

I must have missed those posts.

There's an example about 4 posts up on p300.

And you're right - there were no incentives, recommendations or promises.

[silentbrown]

Minglar said:

At £19.00 that is an initial outlay of £380.00. They would now have just one share which is currently trading at roughly 40p.

The thing that still confuses me is the the share price has dropped by a factor of ~100, but the market cap has only dropped by a factor of ~10...

I assume thats to do with new share issues somehow?

[Minglar]

silentbrown said:

The thing that still confuses me is the the share price has dropped by a factor of ~100, but the market cap has only dropped by a factor of ~10...

I assume thats to do with new share issues somehow?

Pretty much that but also a combination of the stock split in December 2020 that I mentioned and the RI in September 2022. There have been multiple instances which have diluted holdings although if you took your full allocation in September 2022 the SP rallied quite hard in to mid 2023 and there was a small window of opportunity to get out at a profit. Long gone now of course and the current Market Cap is close to the 2019/2020 low albeit with a much larger number of shares in circulation. I think Jon may have the exact numbers of issuances and dates but you get the picture. I noticed it has closed below 40p today too. Sadly imho I think it can only be a matter of time before additional funding is requested or the company is swallowed up somehow. We shall see. BRM.

[Jon39]

Minglar said:

silentbrown said:

The thing that still confuses me is the the share price has dropped by a factor of ~100, but the market cap has only dropped by a factor of ~10...

I assume that's to do with new share issues somehow?

Pretty much that but also a combination of the stock split in December 2020 that I mentioned and the RI in September 2022. There have been multiple instances which have diluted holdings although if you took your full allocation in September 2022 the SP rallied quite hard in to mid 2023 and there was a small window of opportunity to get out at a profit. Long gone now of course and the current Market Cap is close to the 2019/2020 low albeit with a much larger number of shares in circulation. I think Jon may have the exact numbers of issuances and dates but you get the picture. I noticed it has closed below 40p today too. Sadly imho I think it can only be a matter of time before additional funding is requested or the company is swallowed up somehow. We shall see. BRM.

Touring at the moment, so no exact figures to hand.

Ref. Share price reduction compared to market cap. reduction.

In addition to the answer from Richard, we need to remember that since the IPO on 8 October 2018, shareholders have provided AML with about £1.5 billion additional cash. Hopefully that kind generosity (they must have accepted long ago, not to expect a return) will continue and then the Company can continue.

That extra cash increases the market capitalisation (company market value, calculated by the number of shares in issue, multiplied by the share price), but when continually spending more than earning, cash is draining out of the business, therefore reducing the market cap. In addition, the daily share buyer/seller activity of course also changes the market cap. figure.







Share price movement percentages can sometimes be puzzling.
The chart above (presumably correct) shows a fall of 99% from IPO.
At a quick glance, only 1% to lose now.
Of course we know, that from the current 40 pence, it could in theory fall 100%.