Geely sold 100 million Volvo shares at a price of around 37 Swedish crowns (SEK; 79 CZK) after the market closed on Thursday. At the same time, the shares closed at a price of SEK 40.84 on Thursday. After the start of trading today, the shares are falling sharply, falling as much as 14 percent to SEK 35.25. Since the beginning of this year, shares have weakened by about a quarter.
Geely said it sold shares equivalent to a 3.4 percent stake. Even after the sale, Volvo remains the largest shareholder with a 78.7 percent stake. He wants to use the profit from the sale to support business development within the group.
The share sale came after complaints about the company’s small number of freely traded shares putting pressure on the stock and fueling high volatility, Bloomberg reported. The price at which Geely sold the stake represents a 30 percent discount to the price at which Volvo debuted on the stock market two years ago.
Geely owns a number of automotive holdings in Europe. In 2010, it bought the Volvo brand from Ford, since then it has also acquired stakes in Lotus, Mercedes-Benz and Aston Martin.
Volvo Cars announced last year that it will build a plant for the production of electric cars in the east of Slovakia. The total investment is to be 1.2 billion euros (29.3 billion crowns). The factory in Slovakia will be the company’s first new plant in Europe since 1965. Series production should begin in 2026 and the total capacity should be up to half a million cars per year.