F1 listing postponed to the end of the season

While it was expected that CVC Capital, the main shareholder of the discipline, would publish a leaflet detailing its IPO, it is Bernie Ecclestone who decided to express himself in the columns of the Guardian to announce the postponement of F1’s stock market listing to the end of the season: « We have not yet set a definitive date, but with all the problems in the eurozone and in the markets, we are going to wait for things to calm down a bit. Who would want to try to go public now? I’ve seen what Graff did, and it shows that it’s not the right time. This year, for sure, we are going to go to the markets. I don’t think there’s any urgency, but we plan to do it by the end of the year. With the current situation, people don’t want to invest. Look at the markets: if people don’t want to buy shares of companies that have been on the markets for 20 years, why would they come to invest in a new one now? »

The F1 supremo is referring here to another major listing on the Asian markets that has just been postponed, that of the London jeweler Graff. Indeed, Graff acknowledged that the significant drop in the Hong Kong index (-12% since May 7, when its executives began meeting with institutional investors) posed a significant risk for its introduction to this stock exchange. Their decision was likely supported by the stock market performance of one of their main competitors, Tiffany, which lost 14% of its value in the same time frame.

Obviously, the other big news in the markets was the failed introduction of the social network Facebook: while its stock was initially priced at 38 dollars, it was only traded at 27 dollars a week later. Bernie Ecclestone acknowledged that this also weighed in the balance: « Facebook was obviously a problem but the price they were asking was ridiculous. I will never know how they arrived at that figure. »

If we exclude Facebook, the 72 American companies that went public this year managed to raise $13.1 billion, representing a 53% decrease compared to the amounts raised during the same period in 2011. That is why F1 executives have decided to give themselves some time: « We will wait until October or November, when the Formula One season is over because right now, we simply don’t have the time to meet with investors. »

This leaves an opportunity for other investors to enter the capital of F1, as the three investment funds Waddell & Reed, BlackRock, and Norges Bank have just done. Indeed, it is easier to come to an agreement with a limited number of parties rather than with the thousands of small shareholders that characterize publicly traded companies. Perhaps the teams will realize the economic advantage they would have in joining forces to buy back their own discipline, similar to what is done in the United States…

With the participation of RacingBusiness.fr