Harley-Davidson's electric motorcycle manufacturer LiveWire is now going public
LiveWire is the first listed electric motorcycle manufacturer in the USA to go public.
It was only in July 2021 that Harley-Davidson in the USA turned LiveWire into an independent LiveWire company and outsourced electric motorcycle development to a separate company. Harley-Davidson has founded a special purpose vehicle with the companies AEA-Bridges Impact Corp. (SPAC) and the Taiwanese electric scooter manufacturer KYMCO.
Harley-Davidson holds a controlling interest of 74 % in the new company. ABIC shareholders will hold approximately 17 % and the founders of ABIC and KYMCO will each hold approximately 4 % in their portfolios. The common stock is expected to trade on the New York Stock Exchange under the symbol „LVW“.
LiveWire aims to become the most sought-after electric motorcycle brand in the world and lead the electrification of motorcycling. This transaction will help LiveWire operate as an agile and innovative public company while benefiting from the manufacturing and distribution capabilities of its strategic partners.
Harley-Davidson CEO, Jochen Zeitz
The IPO is intended to inject capital into the LiveWire company for further product development.
The LiveWire company will launch as a standalone public company with $545$ million. This news has given the Harley-Davidson share a strong boost. After the annual report was published in July, the share price briefly rose to 38.00 euros, before falling again shortly afterwards and stagnating at around 32.00 euros.
74%'s stake in the LiveWire company has given Harley-Davidson shares a boost, but the next few weeks will show whether they can maintain this strength.
The H-D share has not been particularly strong recently. Things looked different in summer 2020, when Jochen Zeitz was appointed CEO in spring 2020, the share price rose by a third and sales increased, especially in the USA. If you consider that the share price had already fallen to around €14 before Zeitz took over, investors can now sleep a little more soundly again. Harley-Davidson has paid dividends every year so far, which is not a matter of course in this sector.
The wave of layoffs of around 600 Harley-Davidson employees worldwide signaled a massive cost-cutting course to investors. In general, redundancies are usually well received by investors, but it is doubtful whether the decision, as in this case, was necessarily a good one strategically. Many competent employees were made redundant and vacant positions were not filled. Long-standing chains of contact were thus broken and, in return, the company is increasingly relying on consultants to help develop new company structures.
Despite the agreement on the punitive tariffs, the H-D share has not yet risen
Despite the agreement on the punitive tariffs, Harley-Davidson's share price has not moved much, it is somewhat curious that the external LiveWire company of all things is now causing Harley-Davidson's share price to rise by well over 13 %.
In Germany, the LiveWire has a rather difficult position, technically it is really good, but simply too expensive. According to Harleysite information, there are still around 200 machines in the central warehouse. They actually have to be sold now before the new listed LiveWire company comes onto the European market with new models and repositions the electric motorcycles.
Presentation of the new 2022 Harley-Davidson models
The year 2022 will certainly be a very important year for Harley-Davidson, on January 26, 2022 will probably be the new Harley-Davidson models online, the official announcement is still pending.
The problems with supply availability and the punitive tariffs will hopefully be history once and for all from 2022. This year, only the Pan America has made an impact; it is completely sold out in North America and there are still a few models left in Germany that have to be taken as they were fitted ex works. For the Harley-Davidson dealerships, the financial year in Germany was predominantly poor. 2022 will be the year when we actually expect to see more from the new CEO.
The model policy to date can still be attributed to the predecessor Matt Levatich, which is certainly one reason for the subdued share price so far. There won't be any particular surprises in 2022, but something has to come out of Jochen Zeitz's handwriting. The Electra Glide Revival and the Street Glide Arctic Blast were well received, but weren't really big sellers and the community had the impression that someone had tidied up the warehouse, which makes economic sense if overhangs are reduced.
The Softail Slim is discontinued
The Softail Slim will be discontinued in 2022, with two Softail S models in the pipeline, possibly with the 117cc engine. The biggest question is certainly whether the displacement upgrade for the Milwaukee-Eight Touring models will come next year or not. A Sportster and the 975 cc Revolution Max engine are expected in spring 2022. Harley-Davidson was not at the EICMA this year, traditionally something new is always presented there. In any case, one thing is clear: decisions are increasingly being made at very short notice, so anything is possible, or not.
Anyone who bought Harley-Davidson shares at the weekend can be pleased about the sharp rise in the share price, the further development will be exciting, on Monday evening the indicator was still at „strong buy“, but this is not intended as investment advice.
