Harley-Davidson Hits Stock Throttle With EV Bike Spinoff
Manufacturers are finding that if they want recognition for their innovations, they have to give investors a chance to own them separately.
Investors want the innovations without all the baggage.
Photographer: George Frey/Bloomberg
Legacy manufacturers seeking relevancy in a stock market that is increasingly driven by technology giants and high-flying electric-vehicle makers are finding that two companies are better than one.
Harley-Davidson Inc. announced on Monday that it would create a separate public listing for its LiveWire electric motorcycle unit by merging the business with special purpose acquisition company AEA-Bridges Impact Corp. The transition to electric was a key tenet of Chief Executive Officer Jochen Zeitz’s “Hardwire” strategy to boost the company’s sales growth and profitability. But structural declines in demand meant that plan was set to deliver only mid-single-digit annual revenue growth in the motorcycle segment — an uninspiring target considering overall sales this year are on track to be about 30% below the 2014 peak, as Bloomberg Intelligence analyst Kevin Tynan has noted. The “Hardwire” revamp also entailed $190 million to $250 million of spending annually, a tall order for a company that lacks the backing of a larger industrial parent enjoyed by most of its rivals.