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Volvo IPO

How to trade Volvo’s IPO

Swedish luxury car manufacturer Volvo has announced its intention to list on the Nasdaq Stockholm towards the end of 2021. Discover the potential benefits and risks of Volvo’s IPO, as well as the latest company financials, as it shifts towards an electric future. Traders can sign up to receive an email when Volvo’s shares are officially listed and ready for trading.

UK flag logo
FCA regulated
FSCS logo
Segregated funds
LSE logo
LSE listed

28 October 2021

Volvo going public

$23bn+

Volvo’s valuation

$3bn

Funds raised for new shares

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When is Volvo’s IPO date?

Volvo is expected to debut on the stock market on 28 October 2021.

Although it is owned by Chinese automotive holding company Geely, who bought the company for $1.8bn from Ford in 2010, Volvo will be listing on the Nasdaq Stockholm in the country where it was founded.

Enter your email address below to receive a notification when Volvo has officially listed on the stock market. You can also stay up to date with other upcoming IPOs​, including Polestar, which is owned by Volvo and is expected to merge with a special-purpose acquisition company (SPAC) around the same time.

Volvo’s share price and valuation

Volvo will be pricing its shares between 53 to 68 Swedish crowns per share.

The company is aiming to raise $3bn by issuing new shares, with an estimated valuation of over $23bn, according to Reuters. When compared with other competitors, this comes out to 1/4 of Daimler’s market capitalisation of $100bn, or 1/3 of BMW’s market capitalisation of $62bn.

Approximately $10bn of Volvo’s valuation can be attributed to its stake in EV subsidiary Polestar.

How to trade on Volvo’s IPO

1. Register your interest

By entering your email into the sign-up box above, we will notify you when Volvo’s stock has listed on its chosen exchange.

2. Open an account

Trade on Volvo’s competitors while you wait, including big names like Volkswagen, BMW and Daimler.

3. Pick a strategy

Choose whether you want to go long (buy) or go short (sell). Please note that some trading restrictions may apply on initial trading.

4. Control your risk

We offer a range of execution types and stop-loss orders to help you manage your risk within the often-volatile stock market.

An overview of Volvo’s financials

Volvo posted its best performing half-year results in 2021, with revenues of $16.11bn and 381,000 units of retail sales. However, it revealed later that September revenue had dropped 30% year on year due to a “shortage of components”, which may be referring to the semiconductor shortage that is currently rocking the automotive industry. The company has since decided to prioritise the production and sale of its most profitable models.

According to the Financial Times, Volvo sold more than 770,000 vehicles between June 2020 and June 2021. This is in comparison with Polestar’s 10,000, which may be why Polestar has a lower valuation.

Please remember that past performance is not a reliable indicator of future results.

Why may investors be interested in Volvo’s IPO?

The company is planning to dedicate funds towards its all-electric Polestar brand, given the rising trends for sustainable energy and electric vehicles. Polestar has a valuation of $20bn and is expected to merge with SPAC Gores Guggenheim early next year.

Volvo aims to manufacture 1.2 million cars a year by 2025. It focuses on selling its cars on subscription or directly to consumers (DTC) at a fixed price, rather than through dealerships, which may be a more favoured business model for some who want to save money.

According to CNBC, Volvo says that it plans to become a “fully electric car company” by the year 2030, and this comes with a big interest from investors that are looking for EV companies. Major global economies are also planning to move away from the internal combustion engine (ICE), including the UK and multiple countries in Europe.

What are some potential downfalls for the company?

According to The Economist, Volvo previously attempted to go public in 2018 but the trade war between the US, Europe and China caused speculation that this would harm the company’s valuation and it wouldn’t live up to its $30bn valuation. The IPO was then abandoned by parent company Geely.

As previously mentioned, the global shortage of semiconductors has had a negative impact on the auto industry, reducing the availability of vehicles. Figures released by the Society of Motor Manufacturers and Traders reported a 34.4% decline in registered vehicles in the UK throughout the month of September 2021, which was the “weakest September since 1998”.

Volvo is part of a complex group structure that is owned by Geely, and it is also separate to The Volvo Group, or AB Volvo, since 1999, which focuses on the manufacturing and distribution of trucks, buses and construction equipment. When the IPO is complete, Geely will retain a majority stake in the business but it may also decide to reorganise the holding company and its operations, making it easier for investors to distinguish between multiple brands.

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Client sentiment is provided by CMC Markets for general information only, is historical in nature and is not intended to provide any form of trading or investment advice – it must not form the basis of your trading or investment decisions.

FAQ

Does Volvo own Polestar?

Volvo is the parent company of EV manufacturer Polestar, which is expecting to go public around the same time. Polestar will be merging with special-purpose acquisition company (SPAC) Gores Guggenheim. Read more about the upcoming Polestar IPO​.

What are some other electric car stocks?

Although Volvo’s aim is to shift to an all-electric future, some automotive companies were founded for this exact purpose. This includes electric car stocks​ like Tesla, NIO, Lucid Motors, Nikola and Rivian.

Who are the underwriters for Volvo’s IPO?

Goldman Sachs and SEB Group are reportedly leading Volvo’s IPO, with the help from other banks including BNP Paribas, Carnegie and HSBC.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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