I completely understand why some people attract the observable value offered, looking at the chart of share prices for the car manufacturer Aston Martin (LSE: AML). His shares sell for pennies and are 42% cheaper than a year ago.

However, the company has a very powerful, unique brand that ensures its high level of price force. How hard is to earn money?

I am afraid that Aston Martin actions may end with zero. I do not think that they are as an opportunity as much as a potential trap for value and do not plan to invest. Let me explain why.

Earning money is more hard than spending

Let’s start with the question that I asked above: How challenging can you earn money? The answer, in the case of Aston Martin, is “Very“.

For example, go the first three months of this year. The company has achieved revenues of 234 million pounds. But an operational loss of 67 million pounds. In fact, in this quarter, its operational loss was on average about 71,000 pounds for each car sold (based on wholesale volumes).

How can it be? After all, the prestigious Aston brand means that it can sell his cars for six amounts. Apparently the business model does not work well. Perhaps increasing the volume can assist, but during the quarter they only increased by 1% year on year.

The company had different costs during the quarter that ate profitability, such as software development. However, operational losses have been a consistent topic since Aston Martin recorded on the stock exchange in 2018. I am not sure if the business model is profitable.

The debt can kill the company

Not only that, but operational losses are only part of the image. Aston Martin also has high financing costs to pay for operational losses (or profit), thanks to a pile of debt, which was approaching 1.3 billion pounds at the end of the first quarter.

The shareholders were repeatedly diluted when the company collected novel money, but the net debt was more than one -fifth higher than a year ago. I see the risk of further dilution. In fact, I see the risk that if the day arrives, when repayment or change of debt (or even interest) becomes impossible, Debtholders can take over the company and completely erase shareholders.

This risk is too high for me to even consider touching Aston Martin, which is shared with Bargepole.

I may miss the opportunity

In my opinion, Marek Aston Martin and unique cars are really a great advantage. Although I am depressed as to the company’s prospects, if I manage to reverse it, buying Aston Martin shares may be a real opportunity.

The company expects to generate free cash flow in the second half of this year. This is only part of what I think he has to do to prove his life, but if it hits this purpose, I think it is a step in the right direction.

Despite this, I am afraid that Aston Martin’s cheaper campaign can be a valuable trap. I will not invest.