Selling very expensive cars to rich people might sound like a lucrative business. But Aston Martin Lagonda (LSE: AML) does not seem to make it work well. The Aston Martin share price has been a long-term disaster, losing 99% of its value since coming to the stock market in 2018.
What about more recently, though?
How would someone have done by picking up some Aston Martin shares when they sold for pennies at the start of this year?
Ongoing shareholder value destruction
The answer is: awfully.
Not only did the Aston Martin share price start the year in pennies – it is still there.
The share has shed 23% of its value so far this year. So someone who invested £15,000 in the luxury carmaker at the start of 2026 would now be sitting on a paper loss of £3,450.
As a consistently loss-making company, Aston Martin has not paid a penny in dividends since its shares were listed. So, someone who sunk £15k into the company less than six months back would now be sitting on a paper loss in the thousands, having received no income thus far.
Given Aston Martin’s negative cash flows and large debt pile, I would be surprised if it pays a dividend any time soon (or perhaps ever).
Some valuable lessons
I find that situation instructive in several ways.
It underlines the importance of keeping a portfolio diversified. So far this year, the FTSE 250 index (of which Aston Martin is a constituent member) is flat.
Putting £15k into Aston Martin alone at the start of the year would have seen a big paper loss. But putting that money instead into the index overall would mean its paper value would now be a smidgen above £15k – plus there would have been some dividends.
What is a paper loss, exactly?
If someone owns shares that fall in value, they are sitting on a paper loss. But that does materialise into an actual loss (if at all) until they sell.
That can be an uncomfortable position to be in as an investor – hang on in the hope of recovery or even gain, or cut one’s losses and sell?
Is this now an opportunity?
The direction of travel for the Aston Martin share price suggests that investors are keener to sell than buy right now.
Back in January, some of the positive points in the investment case included the iconic nature of the brand, deep engineering expertise, and the prospects of the Valhalla supercar programme.
That remains true.
Valhalla helped push up the company’s gross profit margins in the first quarter of this year. An increased focus on costs could also help improve profitability. The company cut its year-on-year operating loss sharply in the first quarter – and also its net loss.
Still, the losses are sizeable and net debt of £1.5bn is almost triple the market capitalisation. Those finances scare me as an investor.
I see a risk that if Aston Martin cannot turn cash flow positive it will further dilute shareholders to raise more funds, potentially pushing the share price even lower.
I will not be touching this with a bargepole.
