Continental spin-off Vitesco struggles to debut on the market
BERLIN – Shares of Vitesco Technologies were broadly stable on Thursday in a volatile first market that highlights the challenges facing the German auto supplier derivative of Continental.
The stagnation in the share price, combined with a decline in Continental’s stock price from Wednesday’s close, left Continental shareholders left with a drop in the value of their holdings as a result of the the split.
Continental shareholders received one Vitesco share for every five Continental shares they owned. At the close, this was worth around 5% less than five Continental shares at yesterday’s market close.
Continental, one of the world’s largest automotive suppliers, has delayed the spin-off of Vitesco – which produces powertrains for internal combustion engines (ICE), hybrids and electrics – by two years due to unfavorable market conditions made worse by the coronavirus pandemic.
“We have been faced with developments that no one had foreseen,” Vitesco CEO Andreas Wolf told the Frankfurt stock exchange, adding that “the corona crisis has fully confirmed our strategy … electric mobility is in full swing boom “.
Vitesco shares started trading at 59.80 euros per share and fluctuated between 56.89 and 66.88 euros during the day. By late afternoon, they were trading around 58.7 euros per share, giving the company a market value of 2.34 billion euros ($ 2.75 billion).