The question is on everyone’s lips: is Speedway, the iconic American sports car brand, going to be sold? The parent company, American Media, Inc., owns several brands – including Maxim, Organic Teen, and Manicare – and in February 2020, they released a teaser video showing a Rolls-Royce coming to the rescue of a forlorn-looking businessman. As the vehicle pulls up, the man’s face is obscured by a newspaper as he opens the door. But if you look closely, you can just make out the word ‘Speedway’ on the headline. It looks like this rich guy’s ride is now on the market.
The video was part of a social media campaign designed to drum up interest in the brand’s newest car, the Sixty Six. Although the footage is old, it was recently resurfaced by media outlets following AMA’s decision to halt production of the car in late 2019. The move left thousands of customers in the lurch, and the brand’s share price took a hit.
Here’s the backstory. In February 2021, American Media, Inc. will be hosting an initial public offering (IPO). The Wall Street Journal reported that the offering will value the company at $12-15 billion, with shares priced at $15 apiece. This will make it the largest automotive-related IPO in history. In August 2021, the company’s stock will hit the open market for the first time, likely resulting in an instant uptick in value.
Why The Sixty Six?
The Sixty Six is a joint venture between AMI and the motorsport division of German car manufacturer, MAN. The project began in earnest in 2017, with prototypes appearing a year later. In May 2019, American Media, Inc. took its first steps towards mass production, launching a limited run of 500 cars. The model is named after the speed limit on most American highways in the 1950s and 1960s: sixty six miles per hour. The company had previously tried and tested the concept with a car it co-branded with German luxury goods company, Hermes. The experiment, known as the Quercy, was met with skepticism by buyers who had to order it months in advance. This time around, American Media, Inc. has hedged its bets and offered the public an early-bird deal. The company is now taking orders for the Sixty Six until the end of October 2019. In the meantime, prospective buyers can register for newsletters and update their social media accounts with photos of themselves posing with the sleek midengine sports car. The Sixty Six is not a simple car to track down; it will only be available through a handful of top-tier dealerships across the U.S. And considering its rarity, getting a good deal on one is highly unlikely.
What About The Other Cars?
In addition to the Sixty Six, AMA is also selling off its portfolio of other cars. These include the hugely popular Roadster and the GT-50, a mid-engine beast that’s been compared to a Harrier jet. The latter is currently only available through a leaseback program, with prices beginning at $25,000 per month plus tax and fees. The brand had previously tried and tested the concept of leasing with the Quercy. Like the Sixty Six, the GT-50 was also subject to production halts, leaving thousands of customers in the lurch.
What Does This All Mean?
When a company is valued at $12-15 billion, it means that the market perceives it to be sufficiently large and profitable enough to justify such a valuation. In other words, it is selling at a premium. In the case of American Media, Inc., this is due to its size in the automotive market, as well as the pent-up demand for rare specialty vehicles. This is positive news for investors, provided that the value can be sustained. A steady stream of earnings, coupled with a rising automotive market, could see the company trade at a premium for several years to come.