DBX

Segment
SUV

To say that Aston Martin's current financial situation could be better is a bit of an understatement. Late last month, we learned that AM had to reduce its sales and profits forecast due to falling sales in Europe and its UK home market as well as macro-economic uncertainties. The Brexit debacle hasn't been making things easier. Last week, a $24 million deal fell through that would have seen AM sell the tooling and design drawings for its now-discontinued Vanquish to fellow UK automaker Morgan. And now there's even more troubling news.

Bloomberg reports that the legendary sports car company is facing yet another struggle: its shares plunged as much a 22 percent this past Wednesday following its reported first-quarter operating loss. That's an alarming 55 percent drop over the share price valuing the company at $5.3 billion last October.

This makes AM the third-worst performing stock in its stock group, UK mid-cap FTSE 250, this year. Because of its falling share prices and aforementioned market challenges in general, there's now growing speculation about what could happen next. Aston Martin could try to raise more funds, but it could also become a takeover target. Its current market weakness could be exploited. "It's been a tough time for all of us, but we still believe that what we've done is the right thing for the brand," Aston Martin CEO Andy Palmer said Wednesday.

The company has already cut its sales outlook by over 10 percent, which only pushed down the share prices. For the first half of this year, the company reported an adjusted operating loss of 35.2 million pounds, about $43 million. Last year at this time it reported a 64.4 million pound profit.

Aston Martin decided to go public following Ferrari's massively successful IPO back in 2015. Ferrari has since thrived, but Aston Martin hasn't been nearly as fortunate. So, what needs to happen next? The upcoming DBX SUV must be a huge success, period. Aston Martin also built a new factory in Wales specifically for the DBX, a vehicle that's crucial to raising annual production to 14,000 units by 2023.

In 2018, for example, Aston Martin sold only 6,441 cars. Unless Aston Martin secures additional financing in the very near future, it could find itself subject to a takeover.