Volvo Vehicles CEO Hakan Samuelsson on the automakers’ stock market opening bell on Friday in Stockholm. (Getty Pictures)
STOCKHOLM — Volvo Cars shares surged 22% on their Stockholm market debut on Friday after wrapping up Europe’s largest IPO of the 12 months to date, in a lift for brand new points markets and carmakers’ imaginative and prescient of an electrical future.
The Gothenburg-based firm reduce the scale of its itemizing and priced it on the backside of a previously-announced vary UPDATE 3-Volvo Vehicles offers itself $18 bln price ticket as cuts IPO dimension – Reuters Information on Monday, valuing it at simply over $18 billion and making it Sweden’s second largest itemizing but.
However the profitable deal and robust market response — which propels the valuation to about $22 billion — is a carry for a European automotive trade that has launched into a difficult transition in the direction of electric vehicles (EVs).
It additionally exhibits that whereas the euphoria over preliminary public choices (IPO) within the first half of 2021 is over, the market is open for brand new listings of huge corporations with a narrative to inform.
Volvo Vehicles Chief Govt Håkan Samuelsson mentioned the itemizing confirmed a recognition of its transition plans, including it could be key for Volvo to display it’s on observe to be the “quickest transformer.”
“There is a a lot greater curiosity out there to spend money on electric car makers than within the typical ones. So we higher do what we mentioned we might,” he informed Reuters in an interview.
Shares within the carmaker, which is majority owned by China’s Geely Holding, had been buying and selling at 64.70 Swedish crowns ($7.59) at 1057 GMT, after being priced at 53 crowns within the IPO.
Polestar
Other than Volvo’s dedication to changing into a purely electrical carmaker by 2030, it additionally has a 49% stake in EV enterprise Polestar, which mentioned in September it would go public through a $20 billion deal.
Samuelsson mentioned Polestar had a “good valuation.”
“They’re already electrical… displaying in a method what the potential could be for Volvo if this (the transformation) is completed in the precise method.”
A supply accustomed to Volvo’s transaction mentioned the end result of this week’s IPO was good, though traders had pushed again and compelled Volvo to cost on the backside of the introduced vary.
“The corporate needed to compromise on dimension and the governance construction. They had been hoping for a learn throughout on Polestar, however they had been clearly not getting that,” the supply mentioned, requesting anonymity as a result of they weren’t authorised to talk to the press.
Issues over how a lot management Geely will retain over Volvo, issues within the international provide chain and worries carmakers could possibly be caught in commerce wars involving China additionally curbed investor enthusiasm.
Samuelsson mentioned the worldwide semiconductor scarcity was nonetheless problematic, however moving into the precise course.
“Within the fourth quarter it appears higher, although we won’t see the volumes we had final 12 months.” he mentioned, including the scenario would hopefully additional normalize subsequent 12 months.
Geely Chairman Eric Li mentioned that when Geely acquired Volvo, its purpose had been to ship “the tiger again to the mountains.”
“Now our purpose is to offer that tiger wings and let it soar,” he mentioned in a pre-recorded video throughout a webcast opening ceremony on Friday.
