Volvo shares tank 10% as Geely trims stake
- Geely sold about 100 million Volvo shares at a discount on Friday.
- The Chinese automotive company still owns 78.7% of Volvo Car.
- Volvo stock is now down more than 35% versus its YTD high.
Zhejiang Geely Holding Group has trimmed its stake in Volvo Car AB (STO: VOLCAR-B). Shares of the Swedish automaker are down over 10% at writing.
Geely sells Volvo shares at a discount
Copy link to sectionOn Friday, Geely sold 100 million shares of the car manufacturer at a significant discount. The sale totaled about $350 million.
The Chinese multinational automotive company still owns 78.7% of Volvo Car. According to Daniel Donghui Li – its Chief Executive:
We remain steadfast in our commitment to continue support of Volvo Cars on its transformation towards becoming a fully electric car maker, and look forward to continuing this global success story.
Geely acquired the Swedish car company that has notable brands like Polestar and Smart under its banner in 2010. Volvo shares are now down over 35% versus their year-to-date high.
Why did Geely sell Volvo Car stock?
Copy link to sectionAccording to Zhejiang Geely Holding Group, selling shares of Volvo Car AB is in line with its broader strategy and will help the automaker with liquidity.
The Chinese owner is convinced that the move it announced today will “offer more opportunities to generate sustainable long-term value for institutional and retail investors.”
It plans on using proceeds from the share sale for business development.
The news arrives less than a month after Volvo Car said its operating profit jumped a whopping 75% year-on-year to SEK 6.1 billion ($580 million) in the third quarter of 2023. Wall Street currently has a consensus “hold” rating on Volvo shares.
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