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Cazoo’s share price has fallen to less than half of what it was at initial valuation just five months ago

  • Online retailer floated in New York last August with a valuation put at more than £5bn
  • The launch price of its shares was $10 but they’re now trading at just $4.15 each
  • Collapse in price has had knock-on effect on investors including Daily Mail’s owner

Time 9:56 am, January 23, 2022

Cazoo’s shares have crashed to less than half of their initial price just five months after the company became publicly owned.

The online car retailer floated on the New York Stock Exchange on August 27 last year via a special-purpose acquisition company, with a launch price of $10 a share (circa £7.40), which valued the company at $7bn (circa £5.2bn).

However, they’re now trading at less than half that – just $4.15 each (£3.06) – pulling the valuation down to $3.12bn (£2.3bn).

It’s left shareholders in the Daily Mail’s owner, among others, licking their financial wounds.

The Daily Mail & General Trust (DGMT) media conglomerate, which owned 21 per cent of Cazoo’s stock, was taken off the stock market this month by chairman and controlling shareholder Lord Rothermere via a deal that was partly paid for with Cazoo shares following its listing.

The Sunday Times said today the headline value of the DGMT takeover was £2.75bn when originally suggested in 2021 and £980m of that would have come from the shares.

But now, thanks to the share price collapse, that means the value received by DGMT shareholders from the takeover via the Cazoo component has plummeted by £565m, dropping to £415.7m, said the Sunday Times.

Lord Rothermere previously said the DGMT’s investment of £117m looked set to be worth eight times that when the company listed, adding that if the company could join the NYSE successfully, the money could help fund the takeover.

The Sunday Times told today how the initial valuation had been greeted with disbelief by traditional car dealers in the UK. Many of them said they’d been valued at a fraction of Cazoo’s price despite selling far more cars.

Cazoo founder Alex Chesterman is understood to regard the share slump as being related to technology stocks as opposed to something specific to the retailer.

Cazoo’s loss deepened to £102.7m in 2020 from £18m the year before

Image: Cazoo

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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