LONDON, Nov 23 (Reuters Breakingviews) – So much for hopes that hydrogen could come to Thyssenkrupp’s (TKAG.DE) rescue. Swedish activist Cevian on Tuesday sold nearly half its 15% stake in the ailing German conglomerate read more after a share price rally triggered by excitement around production of the gas. Although hydrogen will play a central role in the carbon-free economy, sector valuations in the hundreds of times sales look suspiciously bubbly.
Cevian’s reluctance to find out is compounded by the losses it’s swallowing. It bought in in 2013 and 2014 when Thyssenkrupp shares were trading around 18 euros. Assuming it sold close to Tuesday’s market price, it’s accepting a 7.50 euro loss per share, or around 320 million euros in total. Without last week’s 23% rally, the pain would have been greater still. Cevian retains a 7.9% holding in the 7 billion euro steel-to-submarines group, which will be handy if its hydrogen plans do come off. But as votes of confidence go, it’s not great. (By Ed Cropley)