GM shares soar on electric-vehicle spin-off speculation

  • GM plans to sell more than 20 EV models around 2023. A reports says this business could be spun off for $20 billion and eventually be worth as much as $100 billion.

File photo used for representational purpose. (REUTERS)
File photo used for representational purpose.
Check Offers icon Check Offers

General Motors Co. shares rose to their highest level in almost three months after a Deutsche Bank analyst speculated the automaker could spin off its electric-vehicle unit to create more value.

The stock pared a gain of as much as 10.5% in Monday trading before closing up 7.7% at $30.01 a share -- the biggest one-day jump since May 18 and its highest close since June 8. That came after Deutsche Bank’s Emmanuel Rosner wrote in a report published Monday the automaker could be worth as much as $93 a share if GM spins out its electric-vehicle business.

Also check these Vehicles

Find more Cars
Compare
View Offers
Compare
View Offers
Compare
View Offers
Compare
View Offers
Hyundai Kona Electric 2024 (HT Auto photo)
UPCOMING
BatteryCapacity Icon64.8 kWh Range Icon418 Km
₹ 25 Lakhs
Alert Me When Launched
Hyundai Kona Electric (HT Auto photo)
BatteryCapacity Icon39.2 kWh Range Icon452 km
₹ 23.79 - 23.98 Lakhs
Compare
View Offers

GM has pondered such a move recently, Bloomberg reported earlier this month, reviving an idea first mulled internally two years ago. A spokesman declined to comment beyond referring to the remarks its chief executive officer, Mary Barra, made last month.

When asked about the possibility on a July 31 second-quarter earnings call, CEO Barra didn’t dismiss the idea, saying “nothing is off the table," though the company has said nothing about preparing for it.

GM does plan to sell more than 20 EV models around 2023. That business could be spun off for $20 billion and eventually be worth as much as $100 billion, the Deutsche Bank report said. GM’s core business selling gasoline-powered sport utility vehicles and pickup trucks is generating cash but viewed as being in long-term decline and is less exciting to investors than the company’s electric-car plans, it said.

Despite the share gains Monday, the Detroit-based automaker’s stock is down 18% so far this year while all-electric rival Tesla Inc.’s value is eight times that of GM. By spinning off its EV business, GM could get the kind of momentum enjoyed by Tesla and a handful of startups that have lured capital despite their having no vehicles on the market.

Battery-powered cars have caught the imagination of investors in recent weeks, sending shares of Tesla to successive record levels and boosting the value of electric startups such as Nikola Inc., Fisker Inc. and Lordstown Motors Corp., all of which took a fast track chasing public listings after being acquired by special purpose acquisition companies.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.

First Published Date: 18 Aug 2020, 08:05 AM IST
NEXT ARTICLE BEGINS

Check Latest Offers

Please provide your details to get Personalized Offers

Choose city
+91 | Choose city
Choose city
Select a dealer

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.