Volvo Cars Shares Plummet 14% as Parent Company Geely Holding Group Begins Sale of 100 Million Shares
Volvo Cars found itself in a turbulent position as its shares plummeted by as much as 14% on Friday morning. This drop came after its parent company, Zhejiang Geely Holding Group, initiated a sale of approximately 100 million shares of the Swedish carmaker.
At 9 a.m. London time, Volvo’s shares were down by 10.31%, an improvement from their earlier decline of 14%. Year to date, Volvo shares have fallen by a significant 25%.
According to a statement released on Friday by Geely, the sale of Volvo shares aligns with the company’s long-term strategy and is intended to enhance the liquidity of Volvo. The statement also emphasized the goal of creating opportunities for sustainable long-term value for both institutional and retail investors.
Post-sale, Geely will continue to hold 78.7% of Volvo shares, a slight dip from its previous ownership of around 82%. The sold shares, totaling approximately $350 million, were reportedly offered at a notable discount.
Daniel Donghui Li, the CEO of Geely Holding Group, asserted the company’s unwavering commitment to supporting Volvo Cars in its transition towards becoming a fully electric car maker. Geely, founded by Chinese business magnate Li Shufu, acquired Volvo Cars in 2010. Its portfolio boasts a range of global car brands including electric car giant Polestar, Smart, and Volvo.
When approached for comment, Geely did not respond immediately to CNBC’s request. A spokesperson for Volvo Cars redirected the inquiry back to Geely, in line with the parent company’s leadership in the matter.
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