Shares in British luxury carmaker Aston Martin (AML.UK) are resisting declines in the broader automotive sector, gaining nearly 5% today after the company's principal owner, Lawrance Stroll, announced the final signing of a deal with one of Formula One's most prominent constructors, Adrian Newey, agreeing to a salary of £30 million a year. Stroll called the contract with Newey a bargain, and indicated that, as with a longtime friend, they are preparing for a long-term partnership with Aston.
- Newey is considered the 'father' of the structural success of the Red Bull Racing cars, which a dozen years ago did not even dream of playing first fiddle in the world of 'queen' motorsport. Thanks to the work of Newey and his team, Red Bull Racing has climbed to the 'rallying heights' and has so far competed with top teams like McLaren and Ferrari. The Times reported that the constructor may receive a stake in Aston Martin from Storll, as one form of compensation
- Investors hope that success on the F1 circuits, will translate into higher sales of Aston Martin models, where a new version of the Vanquish supercar (V12 engine, 824 hp), whose market rival will be the Ferrari 12 Cilindri, is expected to debut soon
- Accel and HPS Investment Partners funds (about $110 billion under management) have in recent days acquired stakes in AMR GP Holdings Ltd. (owner and operator of the Aston Martin F1 Team), valuing the company at between £1.5 billion and £2 billion. The funds will take a 20 to 25% stake in the holding company, and HPS is believed to have agreed to refinance Aston's debt, which the company took on to finance its own base at Silverstone
- Newey's transfer may indicate that expectations for Aston this and next seasons will be anchored quite high - especially given that the company will have a brilliant constructor and a great infrastructure at the Silverstone facility as well as the construction agreement with the Honda team. Critics suggest that Newey may not be enough unless Aston hires a brilliant driver. Currently driving for the team are Fernando Alonso and Lance Stroll, son of Aston Martin's owner.
The hiring of one of the most outstanding F1 constructor in history, Newey, and the 'infrastructure' prospects that Aston can now offer drivers, may make young, highly talented drivers interested in moving to the team. Following Newey's transfer, a wave of speculation circulated in the media about the possible transition of Formula One's most outstanding young driver, Max Verstappen, who has recently come into some kind of conflict with the Red Bull Racing. Newey will start at Aston as early as 2025.
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Aston Martin shares are trading near the June lows, but have broken out above the EMA50 (orange line), the main resistance level is currently around £1.73 - £1.75 per share (23.6 Fibo, EMA200 average).
Source: xStation5
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