Four-time World Champion Sebastian Vettel has signed to the new Aston Martin factory Formula One team for 2021, and the announcement provoked volatile fluctuation in the British company's stock prices.
On Wednesday shares traded at 54.59 UK pence (approximately AU$0.95). In the wake of the Thursday news there was a 15 per cent surge, culminating in a three-week price high of 63.64 pence (approximately AU$1.15).
Perhaps most remarkable was the oscillation between extremes – in the space of just two hours an 11 percent swing was witnessed that saw prices climb and fall at a rapid rate.
Price at close fell back down to 59.44 pence (approximately AU$1.05).
While the stock has seen significant volatility over the past six months, it has been relatively flat in recent weeks. Sebastian Vettel's addition to the 2021 Aston Martin F1 team saw investors trading on the news.
When Aston Martin was publicly floated in 2018 shares started at £19. They have since restructured, however market capital valuation of the firm has dropped from £4.3 billion (approximately AU$7.59B) to £1.08B (approximately AU$1.91B).
This represents a contraction of more than 75 per cent.
There is a notable contrast with Italian supercar-manufacturer Ferrari, which floated in 2016 with a share price of €40.54 (approximately AU$66). Those same shares today are worth €160.20 each (approximately AU$260.90).
Earlier this year Canadian billionaire Lawrence Stroll bought a 16.7 per cent stake in Aston Martin for £182 million (approximately AU$323 million). Those same shares are now worth around £86 million (approximately AU$152.5 million).
The previous year Stroll led a consortium of investors to buy out the near-bankrupt Force India F1 team, and it was subsequently rebranded as Racing Point.
It will transition into the official Aston Martin team for 2021.
Stroll’s son Lance currently drives for Racing Point, while his teammate Sergio Perez was forced out earlier this week to make way for Vettel.
Vettel moves from Ferrari, and will be replaced by McLaren’s Carlos Sainz.