General Motors Company (NYSE:GM) is reportedly considering a spinoff for its self-driving business unit. According to one analyst, self-driving car company Cruise could be worth a staggering valuation.
Business Insider has the scoop on GM’s potential goldmine.
Cruise, the self-driving car company bought by General Motors in 2016, could be worth a whopping $43 billion, RBC Capital Markets estimates.
That new valuation is nearly four times the figure eyed by Japan’s SoftBank when it invested $2.25 billion in the autonomous driving unit in May. Since then, Bloomberg reported that GM was eyeing a possible spin-off or tracking stock for Cruise.
Joseph Spak, RBC’s autos analyst, notes that there’s no guarantee the unit will be spun off, and that it has been pretty tough to get a handle on GM’s ultimate plans. “Judging how close GM is to a commercial launch is hard, as the company has remained purposefully vague,” the firm shared. “Executives have stated that GM’s fleet will be available in 2019 and continue to say that we are a matter of quarters away from launch, not years.”
Regardless of what GM ultimately decides on Cruise, the massive valuation points to the enormous potential for the self-driving market.
General Motors Company shares were trading at $39.89 per share on Tuesday morning, up $0.14 (+0.35%). Year-to-date, GM has declined -0.84%, versus a 5.34% rise in the benchmark S&P 500 index during the same period.
GM currently has a StockNews.com POWR Rating of B (Buy), and is ranked #4 of 24 stocks in the Auto & Vehicle Manufacturers category.
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