After three years putting it off, waiting for the market to get better, Volvo Cars AB has gone public in Sweden. On their first day they have already made a profit. Part of the company has been offered to the public (free float) to attract more investment.
Three years ago Volvo wanted to go public to attract new investors, but the operation had to be suspended. They expected an approximate valuation of 30,000 million euros. Now, in a very different context, in which Volvo has given up on diesel engines, to exceed 180 km / h, and to become an electric brand, has gone public.
It was scheduled to premiere this morning, after having been postponed for another day. The starting price was 53 Swedish crowns (5.34 euros), that is, the company is valued at 158,000 million crowns (about 15,914 million euros) spread over 2,979 million shares. It is, therefore, the biggest public debut of a company in Europe this year.
Håkan Samuelsson, CEO of Volvo Cars, was there early to ring the bell and start the Stockholm Stock Exchange session, as is tradition when a company debuts on the floor. It could go well, or go bad, it all depends on how the market values whether a company is worth what it is worth, is worth less, or is worth more.
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At the close of the session, Volvo Cars AB has traded at 65.20 kr., an increase of 22% compared to his departure, having reached a session peak of 67.40 crowns, although in the first minutes he reached 55 crowns as a floor. For now, things are looking pretty good. They have obtained 200,000 new shareholders.
Compared to the selective benchmark, the OMX Stockholm 30, Volvo Cars AB performed very well, given the 1.47% intraday decline it experienced. It has also performed better on the stock market than the old matrix, AB Volvo, which is dedicated to industrial vehicles and heavy machinery.
AB Volvo has fallen 1.37% in class A shares throughout the day, and it has also fallen 1.46% in class B shares. On a totally normal day for them, AB Volvo shares are around the 200 crowns. The two companies have gone their separate ways since the sale of Volvo Cars to Volvo in 1999, and the Americans kept the company until 2010.
Its latest model, the Volvo C40 Recharge, recently started production in Ghent, Belgium.
Since 2010 Volvo Cars AB belongs to Zhejiang Geely Holding Group Co., Ltd, Geely To abreviate. It was one of the first major acquisitions of European manufacturers by Chinese companies. The Geely empire has been growing with the acquisition of manufacturers such as Lotus, Proton, London Taxi, etc. They have also created new brands, such as Polestar or LYNK & CO.
Over the years, Volvo and its parent company have been improving their synergies and taking very significant steps. For example, some Volvo models are made in China, they are sold in Europe, and no one is shocked. They share platforms, engines … and the enrichment has been mutual. To begin with, Volvo has avoided disappearing, which is no small thing.
The closing data for the first half of this year has been very good for Volvo. The net profit has been about 968.3 million euros, a big advance from the losses of 117.8 million euros in 2020. During the first half of the year, turnover increased by 26.3% and 381,000 cars were sold.
Throughout the decade Volvo will definitely abandon internal combustion, as it will be a 100% electric manufacturer. Right now its range consists of gasoline and diesel engines, which are not going to be further developed, some plug-in hybrids and its first electric. Little by little, he has convinced his clientele to try new things to be more sustainable.
Volvo also has other ambitions, such as that no one ever die in a car of its brand again, which is why the maximum speed of all its cars was limited to 180 km / h, a matter of policy and image. It is also being researched to make driving safer with a growing array of electronic aids, commonplace for a manufacturer historically associated with safety.
Definitely, the premiere on the stock market has already been very positive, and the gain in a single day is already very overwhelming. Several automobile companies are experiencing increases in the stock market, especially when it is interpreted that their activity looks towards the future. Only the banking and technology sectors are gaining more than the automobile. And that is considering that in 2020 the car plummeted when factories had to be closed right and left due to the pandemic.