Williams is one of the marquee teams in Formula 1 history, but its long (seven-year) streak without success has already had a marked impact on its stock price after a British IPO earlier this year. At least famed designer Patrick Head, who is retiring after the 2011 season, got to cash out!
This article titled “Williams F1 share price plummets 27% after win-less Grand Prix run” was written by Christian Sylt, for The Guardian on Friday 22nd April 2011 09.46 America/New_YorkShares in the Williams Formula One team have fallen by 27% since it floated on Frankfurt’s junior exchange last month. The drop has been driven by disastrous on-track performance which has seen the Oxfordshire-based company make its worst start to a F1 campaign in its 33-year history.
Williams has no points after three races and out of 12 teams it lies 10th in the standings. The best result scored by its two drivers this year has been 13th place in the Chinese Grand Prix on 17 April . Its shares fell 3.4% when they opened for trading the day after the race and over the past month they have lost 13.9% of their value. The shares closed at €17.69 before the Easter break, down from their offer price of €24.21.
The biggest casualty of the reversing share price has been Dutch investment firm Cyrte which was founded by billionaire John De Mol, of Endemol and Big Brother fame. Cyrte became the biggest single investor in the Williams flotation after buying 5% of its shares. The falling Williams share price has dented Cyrte’s fortunes and its stake has lost €3.3m of its value since it was acquired.
Williams itself has not suffered from the declining share price. The team did not issue any new shares in the float and instead the majority of the offering came from its engineering director Patrick Head who will be retiring this year.
Williams is the second most successful team in F1 history with nine championships to its name. However, it last won a race in 2004 and since then has lost sponsors such as Royal Bank of Scotland and the Air Asia airline. Over the past five years Williams has made total net losses of £31.5m and in the 10 months to the end of October 2010 its after-tax profit reversed 41% to £3.9m on revenue of £74.2m.
Sponsorship consultant Julian Cotttam says it may be tough for Williams to replace backers as its falling share price creates a poor image.
“I can’t see any motivation at all for a brand to align with a team that has made such a fundamentally flawed decision,” Cottam said “I didn’t see why Patrick Head was so determined to offload his entire stock in the business at a time when Williams has had a long period without any great success on track.”
guardian.co.uk © Guardian News & Media Limited 2010
Published via the Guardian News Feed plugin for WordPress.