Aston Martin Shares Leap 25% As Billionaire Stroll Buys Big Stake

Aston Martin shares accelerated ahead Friday after news Canadian billionaire Lawrence Stroll will buy up to 20% in the ailing luxury sports car and SUV maker, according to Reuters.

Aston Martin will raise a total of 500 million pounds ($656 million) also with a rights issue from existing shareholders.

Aston Martin shares jumped 25% initially, before slipping back to 4.9 pounds for a gain of just over 21% on the day.

Aston Martin was floated on the stock market in October 2018, at a price of 19 pounds a share. But after profit warnings and weak sales, the shares have lost more than 75% of their value.

The shares have been on a roller-coaster recently after reports Canadian billionaire and Formula 1 team owner Lawrence Stroll wanted to take control of the storied British brand and star of various James Bond spy movies. China’s Geely Automobile Holdings, which owns the Lotus sports car company, had also figured in rumors of companies wanting a stake in the company.

Aston Martin has been in financial trouble as sales slipped, and spending advanced on its new SUV, the DBX, ahead of its launch in the Spring. The company also cut its production forecast for 2019 to between 6,200 and 6,500 vehicles from 7,100.

1,800 DBX orders have been booked since the November reveal.

CEO Andy Palmer has said 2019 Aston Martin adjusted earnings before interest, tax, depreciation and amortization (EBITDA) will fall to between 130 and 140 million pounds ($170 to $185 million).

Aston Martin is owned 33% by private equity firm Investindustrial, Kuwait Investor Group 28% and Daimler 4%.