How can you buy TomTom shares?
Everyone knows TomTom. The company became big thanks to its navigation software and devices. Yet, this branch of sport seems to be under pressure. The arrival of the smartphone and free maps has caused a sharp decline in sales. Nevertheless, investing in TomTom can still be attractive. On this page you can read everything you need to know before buying TomTom shares. You can also find the current price of TomTom here.
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How can you actively invest in TomTom?
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What is TomTom’s current stock price?
Are you curious about the stock price of TomTom? In the graph below you can immediately see the current price of the CFD share TomTom. If you want to trade in TomTom you can also place an order directly by using the buy and sell buttons.
Is it wise to invest in TomTom?
TomTom was once an enormously successful company: before the 2008 credit crisis, the share price was over 80 euros. Today, little remains of this: as companies have started to offer free navigation, the share price has fallen sharply. Moreover, TomTom has made some unsuccessful acquisitions, which subsequently had to be written off.
TomTom is therefore not the most popular choice among many investors. Yet, there are still opportunities for growth: TomTom is, for example, developing more precise maps for autonomous vehicles. If TomTom cooperates with major car manufacturers, this can be good for profitability and the share price. Still, with TomTom it is important to be careful when you think about buying the shares.
In short: what does TomTom do?
TomTom NV is a Dutch manufacturer of navigation systems. It is the largest supplier of navigation applications in Europe and one of the market leaders in the world. TomTom has offices in Amsterdam, Eindhoven, Ghent, Lodz, Harsum, London, Massachusetts, Edinburgh, Berlin, Leipzig and Taiwan with a total of over 3,500 employees.
The biggest threat and how TomTom deals with it
The biggest threat to TomTom is the various companies that market free route maps. Nowadays, you can easily find your way with Google Maps. The maps are of high quality and constantly updated. The number of people who choose to buy a navigation system or navigation app is therefore strongly declining.
Nevertheless, TomTom still has a clear vision for the future. For example, the company regularly tries to enter into partnerships with various companies. For example, TomTom has deals with car manufacturers whereby the navigation software is built into new cars. This does make TomTom vulnerable, however. After all, car manufacturers can end the partnerships at any time.
Revenue from the sale of navigation maps has fallen sharply. In 2010, revenue was still over €1.5 billion, but this has dropped to less than €700 million in 2018. TomTom is therefore focusing on new markets. With the arrival of self-driving cars, TomTom hopes to be more profitable. But how do they envisage this?
With self-driving cars, cost will be less important. The quality of the map will be much more important. After all, you don’t want an autonomous car to lose its way or end up in a ditch. If TomTom succeeds in developing better-quality maps, they could gain a large market share in this area.
Do you think TomTom will succeed in innovating and making more profits in the future? In that case, you might consider buying TomTom shares as an investment.
Tip: look at the whole picture
When you look at the recent profit figures, it seems that TomTom is not performing well. They have gone from a nice profit in 2010 to a loss in 2018. However, a large part of this is due to depreciation. The free cash flow within the company is still high. This is because the costs in addition to depreciation are a lot lower. This may still make TomTom an interesting buy!
Recent and future acquisition
TomTom has recently sold the Telematics branch for 910 million to Bridgestone. They have paid out a large part of this in dividends to the shareholders.
After a takeover, you see that the price of a share drops. This can make TomTom attractive for new acquisitions. When there is a takeover, you often see a premium being paid. If TomTom is eventually taken over, this can push the price up just like that.
TomTom’s shares are volatile. Volatility in shares means movement. An advantage of volatility is that you can achieve good returns with active trading. A disadvantage of volatility is that an investment is less certain. Volatility often attracts many investors. It is funny that boring, more stable shares are often less popular among investors.
Peter-Frans Pauwels and Pieter Geelen started the company Palmtop in 1991 when they had both just graduated from the University of Amsterdam. Palmtop started developing applications for the 1 generation of handheld computers. Before the success of the Psion Series 3, most applications were for business use.
It was only then that it became clear that private individuals also needed personal organizers. Palmtop then started to develop lightweight commercial applications, such as dictionaries, personal finance products, games and route planners.
In 1994, the company was expanded with Corinne Vigreux and in 2001 it got its 4 full partners in the person of Harold Goddijn. The company was then renamed TomTom. TomTom also introduced its first mobile car navigation system, the TomTom Navigator.
This became an enormous success. In 2003, Mark Gretton from Psion also came over to TomTom after which they could develop an all-in-one navigation product. The TomTom Go, a standalone car navigation system, was launched in the spring of 2004. In the same year TomTom Mobile was launched, a navigation application for use in smartphones.
IPO and past price development
In May 2005, TomTom went public and the shares were listed on the Eurolist of Euronext Amsterdam under the code TOM2.
In 2007, TomTom took over the research department of Siemens VDO and started working together with Toyota. Later, in 2009, the cooperation with Renault was also a fact and the Renault Carminat TomTom was released.
In 2010, TomTom shares fell by 10% following Nokia’s announcement that it would be launching free navigation software to follow Google’s lead.