Category: High Finance

By on January 30, 2016

Elon Musk

The automotive and tech blogs are aflutter Saturday with news that Elon Musk has gobbled up another chunk of Tesla stock — this time at a discount.

Musk exercised and held a stock option this week that saw the multi-billionaire increase his ownership of Tesla Motors by 532,000 shares. In total, those shares are worth over $101 million as of the last closing price of $191.20/share.

Here’s where the discount comes in: Musk’s option dictated a price pegged to the share value as of Dec. 4, 2009, before the automaker went public, of $6.63/share — or just over $3.5 million.

Sounds like Elon got a stellar deal. But does any of it matter? Is owning 1/5th of Tesla a big deal?

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By on January 28, 2016

2016 NAIAS Ford Stand

Ford announced Thursday that it had earned a record pre-tax profit of $10.8 billion for 2015 — including $2 billion in the fourth quarter — bolstered by pickup sales in the U.S. and strong growth in China.

The record-setting year for the automaker wasn’t much of a surprise — second- and third-quarter results set records along the way — but Ford’s ability to finally turn a profit in Europe may be the most unexpected news. The automaker had lost money in Europe since 2011.

Latin America, notably Brazil, will continue to be a sore spot for Ford and other automakers. Ford said Thursday it expects to lose more money there in 2016 than the $832 million it lost there in 2015.

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By on January 26, 2016

Jeep-Renegade-19

On Wednesday, Fiat Chrysler Automobiles CEO Sergio Marchionne will update investors on his long-term plans and fourth-quarter profits — namely, how many Jeeps it sold — during his scheduled earnings conference call.

It’s widely expected that Sergio will address the near-certainty that Jeep will build a pickup based on the Wrangler, as well as the future for the Jeep Compass that’ll likely survive from the Patriot/Compass twin billing, and Jeep’s potential to keep afloat fledgling FCA brands such as Maserati and Alfa Romeo.

Analysts say FCA’s ambitious target of $5 billion profit by 2018 would be almost unattainable at this point.

“‘Ambitious’ is not really an adequate word to describe it, ‘fantasyland’ might be more appropriate,” Bernstein’s Max Warburton told Automotive News.

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By on January 18, 2016

2016_VW_Passat_Exterior_Grille

Investors say Volkswagen should have told the world they were cheating earlier because then they could have bought more Apple stock.

That, Mercedes-Benz prices new E-Class in Europe, BMW’s bigger i3 battery and Jeep soars in Europe … after the break!

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By on January 16, 2016

Recalled GM ignition switch

The man in the middle of GM’s faulty ignition switch has finally spoken, and the word “mistake” came up at least twice.

That, does anyone have the number for Google, GM and Honda may join forces, and take a cab … after the break!

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By on January 15, 2016

ford-headquarters

Ford will announce plans early this year to build a new plant in Mexico, Reuters reported Thursday. The $1.5 billion plant will produce 350,000 cars annually and could eventually produce the new Focus after production of that car leaves Ford’s Wayne, Michigan plant in 2018.

Ford didn’t comment on the report.

Reuters said Mexican officials with knowledge of the facility confirmed that the plant would be built in the state of San Luis Potosi.

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By on January 14, 2016

ChevyDealership03.jpg

General Motors will sell highly coveted lease returns and company cars online starting next month through a program called the Factory Pre-owned Collection.

The program, which we’ve covered briefly, will sell lease returns and company cars through an online portal that makes those cars available nationwide. GM said its inventory would be roughly 30,000 cars, which all have fewer than 37,000 miles and be covered by extended warranties from the factory. Potential owners can apply for credit through the online portal and pick up their cars at a nearby dealer.

So … if GM is selling the cars owned by GM and GM Financial (or related bank) from a nationwide database, which can be financed online, and merely picked up at a nearby dealership, isn’t that just a direct sale?

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By on January 14, 2016

Trading Places

Investors aren’t necessarily drinking automakers’ Kool-Aid that 2016 will be full of beer and Skittles.

That, the China-made Cadillac CT6 that’ll eventually get here, El Chapo’s cheapo getaway car and General Motors’ questions get down and dirty … after the break!

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By on January 14, 2016

FCA_Location_1_Torino_Lingotto_high

An Illinois dealer said in a lawsuit filed Tuesday that Fiat Chrysler Automobiles, through its regional sales offices, was intimidating and bribing dealers to report bogus sales at the end of the month to reach inflated sales targets. Automotive News reported first on the lawsuit.

The lawsuit filed by dealers of the Napleton Automotive Group accuses FCA of conspiring to inflate sales numbers through payments of tens of thousands of dollars to the dealer in co-op advertising accounts to disguise the practice. The lawsuit says FCA uses bogus third-party data from J.D. Power and Urban Science to falsely “verify” the sales figures and report publicly that the automaker has continued monthly sales growth since it emerged from bankruptcy in 2009.

The news of the lawsuit and its allegations sunk shares of Fiat so far that trading on its stock was halted in Europe, according to the Wall Street Journal. Read More >

By on January 7, 2016

Volkswagen Pressekonferenz, 10.12.2015

German newspaper Sueddeutsche Zeitung reported Thursday that Volkswagen was preparing to buy back about one-fifth of its cheating diesel cars in the U.S., according to Reuters.

That would mean about 115,000 cars — likely older models that would need significant work to bring emissions into compliance — could be taken off the road in an historic buyback. According to the report, the cars would be bought back by the automaker for their purchase price or by significantly discounting a new model for those owners.

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