Aston Martin Returns To Formula 1 By Way Of Stroll & Racing Point

Stroll Buys ~17% Of Aston Martin With The Plans To Re-Brand Racing Point For 10 Years Starting In 2021

Headlines:

  • Aston’s Trouble Telegraphed
  • The Elephant In The Room That Is Red Bull Racing
  • The Nuts & Bolt Of The Deal

Aston Martin Needed CPR

It’s no secret that Aston Martin hasn’t had the easiest times as of late. British sports-car maker took a gamble and decided to initiate an IPO in October 2018. They seemingly hovered around $22 – but it became evident that may not last.

And by the time the 4th quarter began in 2019, they were lucky to pull in a quarter of that. So the news breaking that Lance Stroll was finally buying 16.7% surprised no one.

Not even Andy Palmer whose initial reaction to the elevated interest from Stroll was flatly: “It’s a rumor. We’re a public company. I can’t speculate on rumors.”

Sure. Legally, he’s required to say that otherwise the SEC might come knocking. I mean, who could forget Elon Musk’s weird behavior in 2019 between his questionable tweeting and guest appearance on The Joe Rogan Experience Podcast. But even in late 2019 not even the CEO seemed to fully appreciate the likelihood that this was going to happen.

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The Implication On Formula 1 For Aston Martin

The plans official details which are important to Formula 1 fans state that the current race team of Racing Point will be rebranded essentially as Aston Martin F1 Team in a deal with legs for 10 years. All this is to begin in 2021 just in time for new regulations.

A key component of the deal means the delay of the promising tech Aston had in works in the EV department until after atleast 2025. This includes the previously announced Rapid E development as they look to turn up $10-12 million. Meanwhile, AM will continue work of the hypercars division.

To complicate things a bit, Aston Martin now have to answer the difficult question of what they are to do about their current technical partners who are heavily involved in three major projects right now:

  1. The Valkyrie.
  2. The Valhalla.
  3. The Vanquish.

The Vanquish is particularly interesting because of the shear level of technical expertise needed on the hybridized V6 engine Aston was playing a key role in developing.

Aston Martin have a current deal in place that terminates at the end of the 2020 season with Red Bull Racing. It’s unlikely, even impossible, they renew that contract. For this to have gone through, Red Bull would have had to release Aston Martin from any legally binding exclusivity agreement in the first place. This, even just a legal stipulation, can be seen as the official exiting of the partnership as we know it. The only other option for the love triangle to continue is a merger. But this would be one of the largest in Formula 1 history from a pure dollars and cents category.

The Financials Of The Aston Martin Deal

Now that we’ve covered the Formula 1 implications as well as the second-hand effects, the remaining details are:

  • The short term inflow injection amounts to $73 million
  • 45.6 million new shares at $5.25 per share
  • New Rights Issuance approved to raise $418 million

The future of Aston Martin has a question mark on it. It’s a major luxury automotive company that Lawrence Stroll has just bought his way in as Executive Chairman. Despite his positive results in the past, he’s still a corporate raider. Andy Palmer remains CEO… for now.

See you on the grid, Aston. And hopefully in that beautiful, glorious green.

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