Cars and Drivers
GM Cruise Lands a Multibillion Investment From SoftBank
Published:
Last Updated:
General Motors Co. (NYSE: GM) shares saw a solid gain on Thursday after it was announced that SoftBank Vision Fund would be making a sizable investment in the GM Cruise. Overall, SoftBank is investing $2.25 billion to further strengthen GM Cruise’s plans to commercialize AV technology at a large scale. Note that GM also will be investing $1.1 billion in this as well.
On the other hand, one car company is struggling on this news, and could really use the investment. Tesla Inc. (NASDAQ: TSLA) shares continue to slide, not only on this news but also closing out a disappointing month. Tesla is now facing even more problems regarding its Autopilot mode after another crash was reported this week, this time in California.
Back to the GM deal: the SoftBank Vision Fund investment will be made in two tranches. At the closing of the transaction, the Vision Fund will invest the first tranche of $900 million. At the time that Cruise AVs are ready for commercial deployment, the Vision Fund will complete the second tranche of $1.35 billion, subject to regulatory approval. Together, this will result in the SoftBank Vision Fund owning a 19.6% equity stake in GM Cruise and will afford GM increased flexibility with respect to capital allocation.
Michael Ronen, managing partner, SoftBank Investment Advisers, commented:
GM has made significant progress toward realizing the dream of completely automated driving to dramatically reduce fatalities, emissions and congestion. The GM Cruise approach of a fully integrated hardware and software stack gives it a unique competitive advantage. We are very impressed by the advances made by the Cruise and GM teams, and are thrilled to help them lead a historic transformation of the automobile industry.
Shares of GM were last seen up over 10% at $41.86, with a consensus analyst price target of $47.52 and a 52-week trading range of $33.05 to $46.76.
Tesla shares were last seen down 2% at $286.01, with a consensus price target of $309.09 and a 52-week range of $244.59 to $389.61.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
