Harley-Davidson's electric motorcycle manufacturer LiveWire is now going public
LiveWire is the first listed electric motorcycle manufacturer to go public in the USA.
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. For this purpose, Harley-Davidson has formed a special purpose vehicle with the companies AEA-Bridges Impact Corp. (SPAC) and the Taiwanese electric scooter manufacturer KYMCO.
Harley-Davidson holds a controlling 74% stake in the new company. ABIC shareholders will hold approximately 17% and the founders of ABIC and KYMCO will each hold approximately 4% in their portfolio. The common shares are expected to trade on the New York Stock Exchange under the symbol “LVW.”
LiveWire is committed to becoming the most sought-after electric motorcycle brand in the world and leading 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 route to the stock market is intended to inject capital into the LiveWire company for further product development.
The LiveWire company will launch as an independent public company with $545 million. This news gave Harley-Davidson shares a big boost. After the annual report was published in July, the share price briefly rose to 38 euros, shortly afterwards it fell again and stagnated at around 32 euros.
The 74% stake in the LiveWire company means that Harley-Davidson shares are moving; the next few weeks will show whether they can maintain this strength.
HD stock hasn't been particularly strong lately. Things looked different in the summer of 2020. When Jochen Zeitz was named CEO in the spring of 2020, the share price rose by a third and sales rose especially in the USA. If you consider that the price had already fallen to around 14 euros before Zeitz took office, investors can now sleep a little more peacefully again. Harley-Davidson has paid out dividends every year so far, which is not a given in this sector.
The wave of layoffs of around 600 Harley-Davidson employees worldwide signaled to investors that massive cost savings were underway. In general, staff layoffs are usually well received by investors, although one may doubt whether the decision, as in this case, was necessarily a good one strategically. A large number of competent employees were laid off and vacant positions were not filled. Long-term contact chains have been interrupted and in return, more and more consultants are being used to help develop new company structures.
Despite the agreement on punitive tariffs, HD shares have not risen so far
Despite the agreement on punitive tariffs, Harley-Davidson's share price hasn't moved much. It's a bit strange that the external LiveWire company is now causing the Harley-Davidson share price to rise by well over 13%.
In Germany the LiveWire has a difficult situation, technically it is really good, but the price is 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.
Introducing the new Harley-Davidson models 2022
The year 2022 will certainly be a very important year for Harley-Davidson. new Harley-Davidson models are expected to be January 26, 2022 , the official announcement is still pending.
Hopefully the problems with delivery and the punitive tariffs will finally be history by 2022. Only the Pan America has taken off this year; in North America it is completely sold out; in Germany there are still a few models that you have to take as they were equipped at the factory. In any case, the financial year in Germany was largely bad for Harley-Davidson dealers. 2022 will be the year when we actually expect more visible things from the new CEO.
The previous model policy can still be attributed to its predecessor Matt Levatich, which is certainly one reason for the subdued share price so far. There won't be any special surprises in 2022, but something has to come from Jochen Zeitz's handwriting. The Electra Glide Revival and the Street Glide Arctic Blast were well received, but they weren't really top sellers and the community had the impression that someone had cleared out the warehouse, which in turn makes economic sense if overhangs are reduced.
The Softail Slim is discontinued
The Softail Slim will be discontinued in 2022, and there will be two Softail S models in the pipeline, which may come with the 117 engine. The biggest question is certainly whether the displacement upgrade will come to the Milwaukee-Eight Touring models next year or not. A Sportster and the 975cc Revolution Max engine is expected in spring 2022. Harley-Davidson wasn't at EICMA this year; traditionally, something new is always presented there. One thing is clear, decisions are increasingly being made at very short notice, so anything is actually possible, or not.
Anyone who bought Harley-Davidson shares at the weekend can look forward to the strong price increase. Further developments will be exciting. On Monday evening the indicator was still at “strong buy”, which is not intended to be investment advice.
